Shelling of energy infrastructure has led to an increase in demand for steel structures — Opinions

The steel structures market remains unstable but has potential for development in the medium term

Despite the challenging environment, Ukrainian steel producers are showing growth. After a certain decline in orders caused by the suspension of USAID funding, the government has again prioritized the strengthening of critical infrastructure and the creation of protective structures, especially after massive drone attacks. Other drivers of demand for steel structures include infrastructure rehabilitation projects and industrial construction.

Production activity

Following the results of three quarters of 2025, we see positive market dynamics in our segments. During this period, the company increased production of steel structures by 600 tons, which corresponds to a 24% increase compared to the same period in 2024.

The demand for steel structures is quite high, driven by government infrastructure reconstruction projects and the private sector, including energy and industrial construction. Demand for steel structures increased especially in the fall after massive missile and drone attacks on energy infrastructure.

In January-September, the volume of galvanizing work increased by more than 1,000 tons, up 12% year-on-year. This is the result of growing demand for hot-dip galvanizing services in infrastructure, energy and industrial projects.

Current market situation

The construction and steel structures market in Ukraine is showing a gradual growth trend. This is driven by the active restoration of infrastructure in the affected regions, housing construction, in particular for internally displaced persons, as well as the need to rebuild and strengthen critical infrastructure and create protective structures.

Competition among producers is declining as some companies have been forced to suspend operations or operate at lower volumes. In the short term, the workload of operating producers will increase as demand exceeds supply.

Overall, the market remains unstable but has positive development potential in the medium term, provided the security situation and access to energy resources stabilize.

Changes in the sectoral structure of demand

There have been noticeable changes in the structure of demand over the last period:

Road construction. This sector is showing a decline in activity, mainly due to a reduction in funding for infrastructure projects and a shift in government priorities to restore critical facilities.
Agricultural sector. It remains relatively stable: order volumes did not increase, but did not decrease either. Agricultural enterprises continue to maintain their production capacity, investing mainly in modernization and maintenance of existing facilities.
Energy. Demand for structures to restore and reinforce power grids, overhead power line towers, and substation components increased significantly. This area is becoming one of the main focuses for steel producers.
Protective structures. The construction and strengthening of defensive structures, including critical infrastructure facilities, has become significantly more active. There is a growing need for the rapid production of reliable steel structures that can ensure the safety and resilience of facilities to external influences.

To summarize: the demand structure has shifted towards energy and security projects, while road construction has lost its priority. This leads to a change in approaches to production planning, resource allocation, and the development of technical capabilities.

Current challenges

The main current challenges in the metalworking industry include the following:

limited production capacities of enterprises;
shortage of qualified personnel;
rising cost of imported raw materials and logistics costs;
power outages;
impact of hostilities in industrial regions.

Forecast of the situation

It is difficult to make accurate forecasts in the current environment as the situation is constantly changing. However, by the end of the year, we expect difficult operating conditions with a deteriorating trend, given the intensification of attacks on energy infrastructure and the approach of cold weather.

We estimate that by the end of this year, all producers will be operating in a difficult environment and in a constantly tightened mode.