NLMK Belgium proposes to suspend sanctions against Russian slabs
NLMK Belgium Holdings, a group of strip and plate mills in Belgium, France, Denmark and Italy, has requested an extension of sanctions relief on Russian slab exports in exchange for investing sales from the trade in a new electric arc furnace.
NBH, which is jointly owned by the Russian NLMK and the Belgian government investment fund Wallonie Entreprendre, has asked the European Commission to extend for four years an exemption from EU sanctions in force on the import of Russian-made NLMK slabs. The corresponding quota expires on September 30, 2024.
NBH is considering the possibility of investing NLMK's income from the supply of slabs to European transshippers in a project for the decarbonization of steelmaking production - the construction of an EAF, which will become the second in the NLMK group in Europe.
The EU suspended purchases of most Russian ferrous metals as part of sanctions against the country over its military actions in Ukraine, but the eighth round of sanctions introduced a deferment of import sanctions on 7.5 million tons of Russian slabs and just over 570,000 tons of billets from October. 2022 – until the end of September 2024.
NLMK supplies the majority of Novolipetsk commercial slabs to NBH plants under a quota of an average of 312 thousand tons per month, which actually amounts to the entire Russian quota for slabs.
“NLMK has applied for a quota extension due to the limited availability of slabs [in Europe],” the German distributor said.
Raw materials supplies from the Black Sea to the EU fell due to the cumulative impact sanctions and the Russian-Ukrainian war in February 2022, and European rollers producing thick sheets were forced to purchase slabs even from Asia to replace material that was traditionally supplied from Ukraine and Russia.
According to a number of participants market, the volumes of slabs coming from Asia, Brazil and other alternative sources will not be enough to saturate the EU market after the Russian quota expires and exports cease from October 2024.
According to the source, NLMK Belgium Holdings in is currently requesting an extension until the fourth quarter of 2028, with the revenue NLMK accrues from these supplies potentially being invested in a new EAF to produce green steel, although no further details have been provided at this stage.
NBH is already working on converting the existing EAF at its NLMK Verona ingot and sheet plant in Italy to produce low-carbon steel.
NLMK Verona's full capacity allows it to produce 350,000 tons of steel per year and 450,000 tons of finished products per year, but its real productivity before the war, when NLMK published operational data, used to be half that - 175,000 tons per year. commercial products, including special sheet steel for medical and energy equipment.
Last month, NLMK completed the sale of its Russian factories for the production of long products to the Industrial Metallurgical Holding. The sale includes EAF mini-plants in Kaluga, the Moscow region and the Urals, capable of producing up to 3.7 million tons of oil per year and 3 million tons of rolled steel per year. The revenue, although not disclosed, may allow NLMK to consider large-scale investments elsewhere.