What are the operational threats for Ukraine’s metallurgical sector?

Metallurgical enterprises in Ukraine are currently faced with three primary risks: the possible loss of coking coal production in Pokrovsk, problems with electricity supplies, and the sea corridor ceasing operations due to shelling.

As stated by President of Ukrmetallurgprom Oleksandr Kalenkov, if a coking coal production enterprise is lost to the Russians, this resource would then need to be imported, increasing costs by approximately 35-40%. Among the other problems facing Ukraine’s mining and metallurgical complex, Kalenkov identifies an increase in railway transportation tariffs, a shortage of personnel, a lack of affordable financing, military risks, the increase in strategic scrap, market dependence on China, and the introduction of the EU CBAM system in 2026.

Meanwhile, Worldsteel revised its forecast for global steel demand in 2024 to 1.75 billion tonnes, down 0.9% year-on-year from a previous forecast of 1.7%. Global demand is expected to recover in 2025 after three years of decline, growing 1.2% year-on-year to 1.77 billion tonnes.