Tight Market Pressures: The Harsh Reality of Ukrainian Steel Exports in 2025
In 2025, Ukrainian steel producers are facing a challenging storm on multiple fronts. A combination of falling global steel prices, rising domestic production costs, trade barriers, and sluggish international demand have put intense pressure on the country’s steel export sector. Despite some resilience in select product categories, the overall foreign trade picture for Ukrainian steel has deteriorated sharply.
Let’s take a deep dive into the latest steel export dynamics and why the outlook remains difficult for the rest of the year.
Iron Ore: A Deepening Decline
One of the hardest-hit segments is iron ore exports, which dropped 10.2% to 11.15 million tons from January to April 2025, while export revenues plunged by 20.9% to $892.99 million.
The reasons are complex but largely driven by weak demand from China, Ukraine’s largest buyer. The price of Fe62 iron ore at Chinese ports slid from $101.5/t to $94.8/t CFR between January and April. Compared to the same period in 2024, where prices averaged $129/t, the current average price has collapsed to $98.1/t.
Adding to the woes, domestic supply constraints have worsened:
- Metinvest Group’s Ingulets Mining suspended operations in September 2024 due to soaring electricity tariffs.
- Ferrexpo, another major player, scaled down production in early 2025, citing the lack of VAT recovery on exported iron ore.
These supply-side shocks, combined with plummeting international prices and rising domestic costs, have made iron ore exports increasingly unprofitable for Ukrainian mines.
Pig Iron: A Brief Boost, Now Facing Collapse
Pig iron exports initially showed promising growth—a 37.4% volume increase to 574,000 tons and a 46% revenue jump to $226.3 million in the first four months. However, this temporary spike came primarily from U.S. buyers.
This window slammed shut in April when the U.S. government imposed a 25% tariff on all imported steel products. In that single month:
- Pig iron exports dropped by 60.1% to 120,200 tons.
- Export revenues fell by 60.6% to $46.9 million.
- Shipments to the U.S. plummeted by 52.9% to 115,500 tons.
Recovery prospects hinge on complex trade negotiations to exempt Ukrainian steel from these duties—a process that is still in its infancy.
A Global Context
Brazil, the primary pig iron supplier to the U.S., has also seen falling prices, indicating global weakness in this market. Brazilian FOB prices dipped from $430 to $420/t during this period.
Semi-Finished Steel: Losing Ground in Europe and Turkey
The export of billets and slabs—Ukraine’s semi-finished steel—fell by 24.6% to 440,000 tons, generating $215.3 million, down 25.3%.
Key Trends:
- European billet prices remained stuck at €690/t EXW Italy, indicating soft demand across the EU.
- Turkey, which did not import Ukrainian billets in early 2024, suddenly purchased 84,300 tons this year. Turkish mills sought to push down scrap prices by switching to imported billets.
But this strategy seems temporary:
- Turkey’s scrap import prices fell to $330/t CFR by May, down from $380/t CFR in March.
- Turkish billet imports from Ukraine are expected to decline sharply or cease altogether as scrap becomes more affordable.
In Europe, local billet prices dropped further to €655/t EXW Italy by May, which is likely to squeeze out Ukrainian exporters further.
Finished Steel: Flat Products Under Price Pressure
Exports of flat-rolled steel in January-April 2025 rose by 4.1% to 554,100 tons, but revenues fell 7.7% to $302.5 million. The EU remains the largest market, particularly for hot-rolled coils (HRC).
Key Challenges:
- HRC prices in Europe declined from €550/t to €540/t CIF.
- Ukrainian steel faces stiff competition from lower-cost suppliers in Vietnam, Indonesia, Malaysia, and Turkey.
- The European automotive sector—a critical HRC consumer—contracted by 1.2% in new car sales, pressured by Chinese imports and lackluster local demand.
Given these factors, the pricing environment is expected to remain weak until at least the end of 2025.
Steel Pipes: A Temporary Bright Spot Facing Future Decline
Steel pipe exports grew 26% to 229,300 tons, bringing in $162.4 million in revenue, up 12.6%.
Notably, OCTG pipe prices in the U.S. surged from $1,760/t to $2,137/t FOB in this window. However:
- The price peaked at $2,350/t in March-April and started declining by late April.
- Falling oil prices globally are dampening drilling activity, which could suppress future pipe demand.
- The U.S. tariffs on Ukrainian steel will likely cut off this key market going forward.
Long Products: The Next Weak Link
The long products segment, mainly rebar, is headed for turbulence:
- European rebar prices fell from €590/t to €525/t EXW Italy by May amid a severe housing construction slowdown.
- Ukrainian rebar sales to Europe could drop by up to 15% in value by year-end.
Projected Losses: A Sobering Outlook
The GMK Center forecasts steep declines across most steel export categories in 2025:
- Flat-rolled products: Revenues down 10-12%.
- Billets and slabs: Revenues down 25-30%.
- Iron ore, pig iron, pipes: Potential revenue drops of 25-30%.
If these trends persist, the Ukrainian steel industry may lose over $1 billion in export revenues in 2025 alone.
The combined forces of falling global demand, foreign competition, geopolitical barriers, and domestic production hurdles are reshaping the country’s steel landscape.
Strategies for the Future
To weather the storm, Ukrainian steel producers must:
- Diversify markets beyond the U.S. and EU.
- Explore long-term partnerships in Asia and the Middle East.
- Accelerate product innovation and value-added manufacturing.
- Invest in cost-saving technologies to maintain competitiveness despite high local tariffs.
Domestic policy adjustments, such as resolving VAT reimbursement issues and tackling energy tariffs, could also help stabilize the sector.
Exclusive: How Ukrainian Iron & Steel Firms Support Their Teams Amid War and Workforce Crisis
Despite the massive challenges posed by warfare, Ukrainian iron and steel companies are setting examples not just by sustaining operations—but by going above and beyond to support their employees and maintain competitiveness in global markets.
Sustained Salary Increases: A Strategic Choice
Even under wartime conditions, major steel groups continue to raise salaries across the board, recognizing the importance of retaining talent and ensuring operational resilience.
- Metinvest Group rolled out wage increases effective April 1, 2025—up to 20% for roles like machine operators and furnace technicians, and around 10% for administrative and senior staff. These employee categories also enjoy production and efficiency bonuses.
- Interpipe, with over 9,000 employees across frontline regions (Dnipro, Nikopol, Samara), has implemented progressive pay rises since March 2023—from 15% to around 20% more recently—targeting both specialist and general staff.
- ArcelorMittal Kryvyi Rih announced a 15% average salary increase starting May 1, 2025, with increments ranging from 5–22% depending on role and risk. The firm also awarded a “13th salary” in early 2024 to recognize sustained employee commitment.
These actions reflect broader industry trends—federations report that steel sector salaries rose 14.4% in 2024, to approximately UAH 27.3 thousand.
Workforce Challenges and Creative Hiring Approaches
The Ukrainian steel sector faces a severe labor shortfall due to displacement, conscription, and frontline threats:
- Metinvest currently has about 3,700 vacancies,
- ArcelorMittal Kryvyi Rih more than 1,000,
- Interpipe around 500.
To address these challenges, Ukrainian firms have adopted inventive strategies:
Accelerated Training Programs
- Metinvest has revamped traditional six-month training to just two months, focusing on core, in-demand skills.
- ArcelorMittal offers internal retraining, allowing workers to switch roles and gain certification across various functions.
- Interpipe provides on-the-job training, pairing new hires with seasoned mentors in licensed programs that include both theory and practice.
Expanding Talent Pools
- Companies have widened recruitment to female workers, especially in roles tied to automation or ergonomics.
- Special programs encourage young talent and internship participants to stay on: ArcelorMittal’s “New Factory” program has seen 700+ students trained, while Interpipe develops students through industry-academic partnerships.
Veteran Support Initiatives
- Metinvest spent over $250,000 in 2024, and plans $550,000 in 2025, on veteran integration, including training, job placement, and mentoring.
- ArcelorMittal Kryvyi Rih has a structured veteran initiative offering health insurance, sanatorium stays, psychological services, and “one-stop” return-to-work coordination.
- Interpipe also provides veteran hiring and assistance packages.
Automation and Multi-Skilling
To offset shortages, companies are investing in process automation and multi-skilled workforce models. By allowing employees to operate across several roles, they reduce downtime and increase production flexibility.
Financial Resilience and Investment in Conflict
Despite war-time interruptions, Ukrainian steelmakers are investing in quality, automation, and capacity:
- Interpipe maintained $83 million investment in production infrastructure—especially at frontline plants like Nikopol.
- ArcelorMittal Kryvyi Rih continues modernization and environmental compliance programs, including new tailings dump infrastructure, blast furnace rebuilds, and water pipeline rebuilding—even after major war damage.
Their commitment signals to international buyers that Ukrainian steel remains reliable, innovation-led, and geared for global supply chains.
Safety, Mental Health & Social Support
Working in conflict zones heightens the need for welfare support:
- Ukrainian steel firms are upgrading safety systems, improving on-site infrastructure, and preparing for emergency scenarios.
- Mental health services—tele-counseling, group sessions, peer support—are being provided at facilities like ArcelorMittal.
- Worker families are supported with food subsidies, medical aid, and educational grants.
These actions are crucial in maintaining workforce resilience and morale under stress.
Why Talent Matters: Global Competitiveness
These efforts aren’t merely supportive—they’re strategic. Ukraine supplies steel to demanding EU and U.S. markets, where certification and traceability matter. To maintain relevance and contract fulfillment, firms must offer:
- Skilled labor
- Operational consistency
- Quality assurance
Large-scale investment in both people and processes allows Ukrainian steel producers to claim a competitive advantage in high-demand markets.
Government and Sector Collaboration Are Key
Despite strong corporate initiatives, the industry appeals for state support:
- Workforce programs aligned between steel companies and government labor services—including retention incentives and training schemes—are being encouraged.
- Conditional policies—such as guaranteeing wartime worker status—help ensure wages and benefits continued as normal.
- Strengthened localization provisions affecting public and infrastructure steel procurements could benefit Ukrainian mills, similar to UK and EU models.
Looking Ahead: Sustaining Growth under Pressure
The industry is building a roadmap for long-term resilience:
- Upskilling and multi-role flexibility: Expanding multi-functional certification for employees.
- Automation investments: Process upgrades to partially offset labor shortages.
- Deepening youth pipelines: Continued work with universities and vocational schools.
- Veteran employment infrastructure: Scaling transition programs and health coverage.
- Environmental financing: Investments in sustainability to align global buyers.
- Export market diversification: Entering markets like North America and the EU.
These strategies aim to preserve Ukraine’s global steel role—even under conflict.
Final Thoughts: Steel’s Resilience Amid War
Ukraine’s steel industry is showing remarkable resilience amid an unforgiving global market, wartime destruction, and a shrinking labor pool. The fight for survival now relies on agile strategies, employee support, and rapid skill development. However, without targeted government assistance and continued foreign market access, the road ahead remains steep.
For a more detailed analysis, you can explore the source articles here:
🔗 Tight Market: What’s Happening to Steel Exports?
🔗 How Iron and Steel Companies Support Their Staff in Times of War
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