Ukraine’s steel exports are at risk of decline in 2025

In 2024, Ukraine reached a local peak in steel exports (forecast at 4.6 million tonnes), largely due to an increase in semi-finished products. However, the forecast for 2025 (3.9 million tonnes) looks less optimistic. This is stated in GMK Center’s article ‘Prospects for the Ukrainian steel industry in 2025’.

Steel exports are expected to decline due to several key factors, including a deteriorating price environment and tighter global import restrictions.

A decline in exports of square billets is a particularly significant risk. In 2024, the disparity between cheaper iron ore and expensive scrap made exports profitable. However, at the end of the year, scrap prices fell due to strong exports of billets from China. This could have a significant impact on Ukraine’s export opportunities in 2025.

Domestic issues also play a role. In particular, ArcelorMittal Kryvyi Rih is forced to operate only one blast furnace due to the difficult economic situation. In addition, the extension of the duty-free regime for Ukrainian steel products in the EU markets in 2025, which expires in June, is risky. Trade with the United States is also in question, especially if new customs restrictions are introduced.

Increased logistics and energy costs also put additional pressure on producers. In particular, Ukrainian Railways is planning to raise transportation tariffs once again. The logistics component in the cost of cargo will increase for coal and ferrous metals by up to 1%. According to ArcelorMittal Kryvyi Rih, the company’s additional logistics costs will amount to more than UAH 1.4 billion a year, which will reduce the competitiveness of products along the chain and could lead to a complete shutdown of production.

The problem with coking coal supplies plays an important role in the challenges. The majority of internal supplies are dependent on Pokrovsk mine, whose operations are under threat due to the hostilities. If the mine is shut down, steelmakers will have to import more expensive coal, which could significantly affect production costs.

Despite all the difficulties, pig iron exports remain stable at 1.3 million tonnes. However, in 2025, the geography of exports may shift towards the US, where markets look more profitable.

If the negative scenarios are not avoided, Ukraine’s steel exports may decline by 600-700 kt in 2025.

As GMK Center reported earlier, consumption of steel products in Ukraine in 2023 increased by 119.3% compared to 2022 to 3.506 million tonnes. Imports totalled 1.12 million tonnes (+79.9% y/y), while exports were 2.98 million tonnes (-31.7% y/y). Overall, steelmakers increased rolled steel production by 0.4% y/y – to 5.37 million tonnes.