Despite the European Union’s ongoing sanctions against Russia, a critical loophole remains: Russian steel slabs continue to flow into the EU market, undermining efforts to diminish the Kremlin’s war economy. More importantly, Europe’s dependence on semi-finished steel imports from Russia poses a direct risk to the EU’s defense industry. Given the substantial volume of Russian steel semi-finished product imports, this raises questions not only about the efficacy of Russia sanctions, but also about the foreign reach over European strategic autonomy. Steel is critical for defense equipment production, and greater European defense autonomy is incompatible with steel imports from the country which both the European Commission and NATO call a “fundamental threat to Europe’s security for the foreseeable future” and “the most significant and direct threat to Allies’ security.”

This research investigates the underlying causes of the EU dependence on Russian steel slabs imports, analyses vulnerabilities along the supply chain, and develops recommendations on how to reduce this dependence. 

The paper is structured in three parts. Part I analyzes steel slab production and processing and the level of import dependence. Part II links Russian slab imports to the EU market, with a focus on Russia-controlled companies operating in Belgium and Italy, and examines trade volumes and sanction evasion patterns. Part III investigates supply chain vulnerabilities, including chokepoints in steel re-rolling capacity and political inertia. The conclusion presents the risks of the EU steel supply chain dependence on Russia and China for EU defense industry production.  It further explains how this dependence has transformed global steel production overcapacity into a critical strategic vulnerability for Europe. The recommendations explore how to reduce Russian import exposure and strengthen European strategic autonomy along the value chain, given the high financial and political cost of domestic steel production.