Steel production in Ukraine next year could remain at the 2025 level of approximately 7.2 million tonnes under baseline scenario, according to a GMK Center forecast.
Ukrainian steel companies have already reached their maximum capacity for production growth, the report claims.
GMK’s optimistic scenario assumes a return to 7.6mt, while the pessimistic scenario assumes a decline to 6.3-6.6mt due to the blocking of maritime logistics and restrictions on the European market, Kallanish notes.
“The main risks are associated with the European market, which accounts for 81% of finished product exports,” the media outlet says. “The introduction of the CBAM carbon management mechanism is already creating technical barriers to imports. A stricter tariff-rate quota system will be introduced in July, potentially reducing EU imports by 40-50%.”
“If Ukraine doesn’t receive a temporary exemption from the CBAM, it will be extremely painful for the industry and we could lose long-rolled and billet exports to the EU, which would lead to the closure of two or three of the seven operating blast furnaces in Ukraine,” the article states.
Alternative markets remain inaccessible due to aggressive Chinese exports and high energy and logistics costs, GMK Center observes. “The main hope lies in the domestic market, which could expand by 5-10% thanks to defence projects or post-war reconstruction,” it concludes.
Ukrainian steel companies decreased crude steel production in November compared with the previous month amid the Russia-Ukraine war, unfavourable global market conditions and logistical problems, according to national steel association Ukrmetallurgprom.
Crude steel output last month amounted to 641,100t, down 1.2% from October but 18.5% more year-on-year. Rolled products output was however up 10.3% month-on-month and grew 18.5% on-year to 589,100t.
Pig iron output increased 1.8% m-o-m and was 29.7% more y-o-y at 704,300t.
January-November steel output decreased 3.1% on-year to 6.81mt, with production of rolled products up 4% to 5.97mt. Pig iron output amounted to 7.2mt, up 10.2%.
