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The EU has once again placed the issue of Russian slab imports on its agenda, proposing a ban on steel products manufactured using molten steel sourced from Russia and Belarus. 18G041 Grain oriented electrical steel, Compounded by the uncertainties surrounding the Carbon Border Adjustment Mechanism (CBAM), traditional import channels for Russian steel into Europe are expected to face increased resistance starting in 2026, leading to a marked rise in associated risks.
In early December, a relevant committee of the European Parliament issued an opinion regarding the European Commission's proposed regulations on steel import restrictions, supporting a 50% reduction in import quotas and the imposition of higher tariffs on imports exceeding these quotas. 18G041 Grain oriented electrical steel, Furthermore, the committee emphasized the importance of the "melt and pour" principle and recommended a phased ban on the entry into the EU market of all steel products manufactured using steel melted in Russia and Belarus.
It is understood that Russian semi-finished products account for as much as 40–50% of the EU's total slab imports, playing a pivotal role in supplying NLMK Group’s European assets located in Belgium, Denmark, Italy, and France. These facilities rely primarily on imported semi-finished products to manufacture hot-rolled coils and heavy plates, with respective production capacities of approximately 2.5 million tons and 2 million tons. NLMK Verona in Italy is the only facility within the group that possesses a smaller-scale steelmaking plant, supported by a rolling capacity of 450,000 tons per year.
Data indicates that in 2024, NLMK's Novolipetsk parent plant exported approximately 2.5 million tons of slabs to the European Union; of this volume, roughly 1.3 million tons went to Belgium, 622,000 tons to Italy, and 500,000 tons to Denmark. In 2025, the company anticipates increasing its export volume to between 2.6 million and 2.8 million tons in an effort to absorb surplus production before the Carbon Border Adjustment Mechanism (CBAM) payment obligations officially take effect in 2026.
Should NLMK's European facilities be restricted from utilizing Russian-sourced slabs, securing alternative supplies would prove extremely difficult, inevitably driving up both slab procurement costs and the production costs of downstream finished products. 18G041 Grain oriented electrical steel, Theoretically, steelmakers could procure alternative resources from Asia, Brazil, and select regions in the Middle East and North Africa; however, the constraints involved are significant.
First, under the impact of the CBAM, a "structural rise" in the price of imported slabs—compounded by a contraction in supply sources—will emerge as a primary source of pressure. Indonesia and India may withdraw from the European market due to potentially high CBAM-related costs, while competition from low-emission sources in Brazil, South Korea, and Turkey is expected to intensify significantly. Second, following the EU's imposition of sanctions against Evraz in October, buyers of its slabs were compelled to seek alternative sources of supply; the volume affected by this shift is estimated at approximately 600,000 tons per year.
In addition to tightening trade policies, the market is also concerned that Russian steel slabs face hurdles regarding compliance with the Carbon Border Adjustment Mechanism (CBAM). Some observers suggest that Russian steelmakers may struggle to verify actual emissions data, thereby being compelled to apply default emission values. Based on the assumption that the EU Emissions Trading System (ETS) price stands at €80 per tonne, preliminary estimates indicate that the CBAM cost for Russian-origin slabs could reach as high as €176 per tonne. Given that exports of Russian slabs to Europe are already operating at a loss in 2025, these additional costs would render such exports economically unsustainable.
It is worth noting that Russian slabs are also widely utilized by Turkish re-rolling mills, which serve as key suppliers of hot-rolled coils, cold-rolled coils, and coated sheets to Europe. According to Turkish customs data, Turkey imported approximately 1.7 million tons of Russian slabs during the first ten months of this year, accounting for 51% of its total slab imports. However, even if the EU were to impose restrictions on "products manufactured from Russian-origin molten steel," Turkey's steel supplies to Europe are not expected to face any substantial disruption. On one hand, Turkish re-rolling mills can pivot to alternative sources to replace Russian slabs; on the other hand, Turkey's major steel producers began gradually reducing their reliance on Russian-origin raw materials more than three years ago.
