Ukraine Monitor

economic and social impacts

Views/information on resilience or disruption of supply chains due to the Russian invasion in Ukraine and various sanctions

11 May 2022

Basic Metals

The European basic metals sector had recovered in both demand and price in 2021 following two tough years linked to the COVID-19 crisis. However, the invasion of Ukraine has created issues in both the supply and cost of raw materials and energy, which are having a major impact on the sector in Europe.

Impact on supply of equipment or raw materials from RU/UA/BY

Various countries, including Slovakia and the Czech Republic, report issues with accessing iron ore and coal, and are looking for alternatives from other countries (e.g. Brazil and Australia). However, this is proving to be extremely expensive.

Nickel prices reached such a high price that an investigation was opened.

The inability to produce steel as normal will impact other sectors, e.g. the automotive sector in the Czech Republic (Skoda).

Some countries' basic metals sectors, such as Finland, are highly integrated with Russia due to their proximity: including coal, RMs, gas, LNG and electricity. However, Finnish trade unions report that their nickel plant is working normally, which could help demand issues in Europe.

Impact of rising energy/commodity prices

Soaring energy prices are causing major issues for EAFs, with some production stopped in Germany and Spain (with temporary unemployment in place), while others have had to reduce their production (e.g. aluminium plant in Slovakia down to 2/3 production). There are concerns for future production in Italy, where 90% of steel plants are EAFs.

Social impacts of sanctions (e.g. companies’ liquidity, wage payments)

  • Specific company examples

Workers at TMK Artrom were unable to access their wages due to sanctions being placed on the company’s billionaire owner. This has now been rectified, but trade unions insist that the sanctions must not impact ordinary workers!

Additional impact worth mentioning

ArcelorMittal halted its production in Ukraine due to safety concerns and is supporting fundraising for UNICEF by matching employees’ donations.

The EU has introduced temporary trade measures to help Ukraine, including the suspension of EU anti-dumping and safeguard measures on Ukrainian steel exports for 12 months. This decision is supported by EU steel CEOs in solidarity with the sector in Ukraine.

The OECD Steel Committee in March featured a strong joint statement in solidarity with steelworkers in Ukraine from TUAC/industriAll Europe and IndustriALL Global.