Ukrainian Metallurgy's Struggle in the European Market
Ukrainian steelmakers are confronting significant challenges in the European market. These stem from unreliable electricity supplies, the impact of the Carbon Border Adjustment Mechanism (CBAM), and stiff competition from Russian semi-finished products. In 2025, Ukraine's rolled steel production increased to 6.52 million tons, a 4.8% rise from the previous year. However, this figure remains a stark 65.8% below the pre-war level of 2021, when output exceeded 19 million tons. This ongoing conflict has devastated industrial capacity and supply chains.
Export and Import Dynamics for Ukrainian Steel
Of the steel produced in 2025, 4.12 million tons were exported, with 82% of those exports destined for the European Union. Meanwhile, EU countries imported over 5 million tons of steel slabs, more than 60% of which were supplied by Russia. This highlights Europe's continued reliance on Russian metal semi-finished goods, a dependency underscored by the EU's extension of import quotas for Russian steel slabs until September 30, 2028. The persistence of these trade flows complicates the market for other exporters.
The new conditions introduced by the CBAM are already negatively impacting Ukrainian exports. As noted by Mauro Longobardo, General Director of ArcelorMittal Kryvyi Rih:
“Due to the implementation of CBAM, ArcelorMittal Kryvyi Rih lost its exports to the EU, which accounted for half of our annual production—over 1.25 million tons.”
This demonstrates how new environmental regulations can substantially affect the competitiveness of Ukrainian producers in the European market.
Furthermore, the situation is compounded by the fact that key slab producers, the Azovstal and Illich Iron and Steel Works, are located in Mariupol. The loss of these major plants significantly affects the overall state of the industry. Ukrainian metallurgy continues to face urgent challenges that must be resolved to reclaim its position in the European market.
The European steel market landscape shows a growing dependence on imports of Russian semi-finished steel, which could further marginalize Ukrainian producers in the region. The advent of new environmental norms like CBAM also raises concerns about the future competitiveness of Ukrainian products. As Ukraine's steel industry strives to recover its production volumes, accounting for these factors is crucial for developing effective market strategies.