Optimistic Outlook for Ukraine’s Steel Market Amid Increased Production and Demand

Recent developments in the Ukrainian steel market indicate a strong recovery trajectory, primarily driven by increases in steel production and consumption. The articles “Zaporizhstal produced more than 1 million tons of steel in January-April 2025“ and “Consumption of rolled steel in Ukraine increased by 23% y/y in Q1“ highlight this upward trend, which is mirrored by satellite-observed activity data from major steel plants.

In the first four months of 2025, Zaporizhstal’s steel output rose by 2.5% year-on-year, exceeding 1 million tons. Meanwhile, the steel consumption market surged by 23% compared to Q1 2024, underpinned by a revival in construction activities, particularly significant for flat hot-rolled thin sheets at a staggering increase of 60%. These developments correlate positively with our observed activity data, which shows overall industrial performance improvements despite localized production challenges.

Activity at Zaporizhstal fluctuated, with a peak showing 30% activity in January, correlating with its increased production of finished rolled steel. Conversely, Donetsksteel Metallurgical Plant has faced significant operational challenges, hitting a low of 12% activity in March, directly impacting its ability to contribute to market supply. Alchevsk Iron & Steel Plant has remained more stable, maintaining a solid 56% activity during March and April, supported by its integrated production capabilities.

Evaluated Market Implications

Potential supply disruptions are evident at the Donetsksteel Metallurgical Plant, which dropped its activity significantly, warranting caution for buyers reliant on this facility. Conversely, increased productivity at Zaporizhstal bolsters supply confidence. Procurement strategies should prioritize sourcing from Zaporizhstal and Alchevsk due to their higher outputs and consistent operational status.

Steel buyers are advised to secure early contracts with Zaporizhstal, especially for rolled products, as demand is expected to remain robust given the construction sector’s growth. Meanwhile, adjustments to procurement strategies may be necessary for supplies depending on Donetsksteel as its production capability remains uncertain.