Posted on 20 Jan 2026
Ukrainian metallurgy may reduce steel production to 6.3-6.6 million tonnes in 2026, compared to 7.41mt in 2025, according to UAprom business portal.
The main reason for the drop in production is likely to be the introduction of the European Union's carbon border adjustment mechanism (CBAM). The EU market is a key sales target for Ukrainian mining and metallurgical enterprises.
According to analyst calculations, the losses of domestic metallurgical enterprises from the introduction of CBAM in 2026-2030 will exceed $300 million annually, Kallanish notes. This is due to the need to pay for CO2 emissions during the production of steel for export to the European Union.
“These losses are unlikely to be compensated at the expense of other markets, as the global economy is experiencing a decline in demand for steel,” UAprom says. “This is largely due to the 50% US steel tariffs. However, this year, domestic metallurgists may be somewhat compensated by an increase in domestic consumption to 4mt compared to 3.mt in 2025.”
According to UAprom, demand for steel in Ukraine is expected to be fuelled by the reconstruction of destroyed infrastructure and programmes to develop the defence-industrial complex. “However, a significant part of this growth will be covered by imported products, as was the case last year,” it adds.
In 2025, Ukraine’s steel output decreased 2.2% on-year to 7.41mt, with the production of rolled products rose 4.8% to 6.52mt. Pig iron output amounted to 7.88mt, up by 11.2% during the year.
Ukraine’s industry performance continued to improve in 2025, reaching its highest levels since the start of Russia’s full-scale invasion, when excluding steel production, according to Ukraine’s experts.
Steel production in the country could remain at 2025 levels of approximately 7.2mt this year under the baseline scenario, it adds. Ukrainian steel companies have already reached their maximum capacity for production growth.
Source:Kallanish
