ArcelorMittal removes Russian resources from its steel distribution network

Governments and businesses around Europe are aiming to reduce their reliance on Russia, which is driving up energy and commodity costs.

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Following the invasion of Ukraine, ArcelorMittal SA, Europe’s largest steelmaker, has removed Russian goods from its supply chain.

Governments and businesses around Europe are attempting to reduce their reliance on Russia, which is driving up energy and commodity costs. The nation has been a vital supply of iron ore and coal to the region’s blast furnaces, and ArcelorMittal required three weeks to prepare how to cease shipments.

The steelmaker previously stated that Russia supplied around one-fifth of the coal for its European facilities. According to its annual report, the business also purchased iron ore from Metalloinvest, which is owned by sanctioned billionaire Alisher Usmanov.

“We are independent now,” said Geert Van Poelvoorde, the steelmaker’s European CEO, in an interview with Bloomberg. “For the third quarter, we need to buy a bit more from non-Russia. But this is not a big issue.”

According to Van Poelvoorde, the war in Ukraine will change global raw material flows. Within a few months, Russia will reroute coal shipments from Europe to China, which will purchase less fuel from Australia.

Steel prices in Europe have risen to new highs following the European Union’s decision to limit Russia’s shipments to the union. High energy prices have also prompted several steel manufacturers to reduce production, further reducing supplies.

ArcelorMittal’s portfolio of iron ore and coal mines aided the company’s shift away from Russia, but other European steelmakers may have a more difficult time finding alternative supply. According to Van Poelvoorde, Russia accounts for around half of the coal consumed by Europe’s steel sector.

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