Ukrainian Steel Industry Exceeds 2024 Expectations Despite Challenges
Ukraine’s steel industry has shown remarkable resilience in 2024, exceeding production expectations despite ongoing challenges related to the war. Preliminary estimates suggest that the country’s steel output could reach 7.5 million tons this year, a 21% increase from 2023. However, this output remains significantly lower than pre-war levels, with a stark contrast to the 21.4 million tons produced in 2021.
The industry’s recovery can largely be attributed to the launch of the maritime corridor at the end of 2023. This sea route has alleviated logistical bottlenecks and has opened new export avenues, particularly to European and Asian markets. For instance, the second blast furnace commissioned at ArcelorMittal Kryvyi Rih (AMKR) has been a pivotal factor in boosting production. Over the first 11 months of 2024, exports of semi-finished products rose by 60%, adding an additional 650,000 tons. Similarly, exports of rolled products increased by 40%, with 500,000 tons shipped out. One of the most significant achievements in 2024 was the resumption of iron ore exports to China. By November, Ukraine had shipped 13 million tons of iron ore to China, accounting for 43% of total exports. This development marks a substantial recovery from previous years, with Chinese demand bolstering Ukraine’s economic prospects amidst the ongoing conflict.
Despite the positive growth in 2024, forecasts for the steel industry in 2025 remain cautious. The ongoing war poses significant risks to both production and exports, and rising energy costs and increasing logistical pressures threaten the industry’s competitiveness. Electricity prices in Ukraine are now higher than in many European countries, while railroad tariffs have also risen, further inflating production costs. These factors could lead to a reduction in production capacity or even the closure of facilities if the situation worsens. However, the industry’s performance in 2024 demonstrates that, despite the severe challenges posed by the war, Ukraine’s steel sector can adapt and grow by embracing new logistics solutions and boosting production capabilities. Although the road ahead is fraught with uncertainties, the progress made in 2024 offers hope for the future of Ukraine’s iron and steel industry.
