Tight market: what’s happening to steel exports?

The decline in world prices for steel products reduced export revenues of Ukrainian steelmakers in January-April 2025. Negative dynamics is observed for the majority of commodity items. The exception is long products and pipes. But it does not affect the overall picture.

Raw materials and semi-finished products

The most sensitive blow fell on iron ore export. In January-April it fell by 10.2% – to 11.15 million tons and by 20.9% – to $892.99 million. The deterioration was caused by a combination of external and internal factors.

First, about external ones. China is the main market for iron ore for Ukrainian mines.

The cost of imported Fe62 iron ore in Chinese ports from January to April decreased from $101.5 to $94.8 /t CFR. It is important to clarify that it was also declining in January-April 2024. But from $140.3 to $117.7/t CFR. That is, a year ago for the same period the average price was $129/t, now it is $98.1/t. Hence, the drop in foreign currency earnings.

We should also note the shutdown of Metinvest Group’s Ingulets Mining in September 2024 due to high electricity tariffs. And this spring, another major player, Ferrexpo, has already reduced production due to non-recovery of VAT for iron ore products supplied for export. In January-April 2024, the above-mentioned enterprises worked uninterruptedly.

This is one of the reasons for the decrease in the indicator in physical terms. Plus unfavorable price environment. It makes sales in the external market unprofitable for a number of Ukrainian mines. The situation resembles scissors: production costs are growing due to high tariffs of state monopolies, while the prices for saleable products are falling. In order not to accumulate losses, they have to reduce shipments.

Export statistics for pig iron for 4 months is optimistic at first glance. The growth was 37.4%, up to 574 thousand tons, and 46%, up to $226.3 million. But it should be taken into account that the main buyer of Ukrainian pig iron were American steel mills.

Since April, the U.S. administration has imposed an additional duty of 25% on imports of steel products from all countries. Therefore, already in April, pig iron exports collapsed by 60.1% compared to March, to 120.2 thousand tons and by 60.6%, to $46.9 million. At the same time, pig iron supplies to the U.S. from Ukraine collapsed by 52.9%, to 115.5 thousand tons.

Further dynamics will also be negative. Withdrawal of Ukrainian steel from the additional duty may solve the problem. But it will take time. Ukrainian Trade Representative Taras Kachka said at the end of May that the parties are only at the beginning of negotiations on this issue.

Brazil is the main supplier of pig iron to the United States. And here export quotations for January-April fell from $430 to $420/t FOB. I.e. market conditions are unfavorable for all producers. The same is true for steel billets.

European steel billet prices held steady at €690/t EXW Italy in January-April. This indicates weak demand from consumers in the EU. European rolling mills are the main buyers of Ukrainian billets and slabs. Therefore, exports of semi-finished products from Ukraine for 4 months decreased by 24.6% – to 440 thousand tons and by 25.3% – to $215.3 million.

An important nuance. Turkey was among the importers. 84.3 thousand tons of billets were shipped there in 4 months. In the same period of 2024 there were no shipments. This is explained by the marketing strategy of Turkish steel mills.

In an effort to reduce prices for scrap, the main raw material for electric steelmaking, they have been reducing its purchase since the beginning of the year. And for rebar production they used imported billets. First of all, Ukrainian billets.

In principle, it worked. The cost of imported HMS 1&2 (80:20) scrap in Turkey fell to $330/t CFR by early May compared to $380/t CFR at the end of March, the local maximum in 2025. Therefore, we can now expect a reduction or even a complete cessation of semi-finished steel exports from Ukraine in this direction.

In the EU, Ukrainian steel mills will also lose both sales volumes and semi-finished products revenue. As in May offers of local billet producers dropped from €690/t to €655/t EXW Italy.

Finished steel

Flat-rolled steel exports from Ukraine in January-April grew by 4.1% – to 554,100 tons. But the revenue decreased by 7.7%, to $302.5 mln. The EU market remains the key market for sales in this segment.

During this period, European hot-rolled coil quotations fell from €550/t to €540/t CIF. It accounts for more than 80% of foreign sales of flat rolled products. Thus, a slight increase in shipment volumes did not offset the effect of falling prices.

They were declining for two reasons. Firstly, availability of cheaper offers from Vietnam, Indonesia, Malaysia, Turkey. Ukrainian producers have to take this into account in their marketing strategy. Secondly, weak demand from the main consumer, the European car industry.

In January-April, sales of new cars in the EU decreased by 1.2% – to 4.468 million units. This is the result of strong competition from Chinese models and the lack of such powerful programs to stimulate the purchase of new cars, as in China and India.

These factors are classified as fundamental. Therefore, there is no reason to predict an improvement in the situation. At least until the end of this year.

Export of steel pipes from Ukraine in 4M increased by 26%, 229.3 thousand tons, and by 12.6%, up to $162.4 mln. During this period export quotations for OCTG pipes in the USA increased from $1760/t to $2137/t FOB. But here we should take into account that the local maximum of $2350/t was held in March and the first half of April. Already from April 18 producers’ requests began to decrease, as of May 30 remaining at $2137/t FOB.

A new price surge is unlikely due to falling oil prices, which makes investments in oil and gas production development unprofitable. This is what provides demand for OCTG. Besides, one should take into account the loss of the American market for Ukrainian pipe makers due to the aforementioned additional 25% tariff on steel imports.

Deterioration can be predicted for long products as well. Here the main export flow goes to the European Union. European quotations for rebar in January-May decreased from €590/t to €525/t EXW Italy amid the crisis in housing construction. This is a prerequisite for a drop in sales of Ukrainian long products, which may reach 15% in monetary terms over the year.

In the segment of flat rolled products the annual decline in export revenues is forecasted to be within 10-12%, for billets and slabs – by 25-30%. Since it would be too optimistic to count on a quick reorientation of sales. Exports of iron ore, pipes and pig iron may also drop by 25-30%, if the current dynamics is maintained.

In such a scenario, which can be called the base scenario, the total loss of export revenues of Ukrainian steel industry in 2025 may exceed $1 bln. In general, the results of 4 months confirm the previous forecast of GMK Center about the deterioration of the price situation in foreign markets and reduction of steel exports this year.