Anticipated Decline in Steel Prices Amidst Increasing Chinese Exports and Reduced European Demand in 2025

The global steel market faces ongoing challenges as rising exports from China and weakening demand in the European Union exert downward pressure on prices. In 2024, Chinese steel exports surged by 25%, reaching up to 118 million tons, while EU's steel-consuming sectors saw a decline in activity by 3-4%.

This mismatch contributed to a significant 11% drop in flat steel prices across Europe last year, pushing many producers towards financial instability. The Ukrainian steel sector, heavily reliant on EU exports, is particularly vulnerable, as 80% of its steel heads to European markets.

Analysts foresee further troubles in 2025, projecting a 4% decrease in EU flat steel prices due to persistent high Chinese exports and a 0.7% global reduction in steel consumption. Additionally, steel prices could face further challenges from a forecasted drop in iron ore prices, which are expected to decrease by 13-14% to $95 per ton, further straining producers' profitability, especially in Ukraine where iron ore is a key profit driver.

The situation is exacerbated by high market volatility and economic uncertainties in China, compounded by rising energy costs and logistics expenses in Ukraine, which threaten the competitiveness of its steel industry both domestically and internationally.

Despite a slight increase in rolled steel production in Ukraine in 2023, the overall industry dynamics remain strained with significant declines in exports and shifting production levels influenced by ongoing geopolitical tensions.