Ukraine’s rolled steel market faced significant headwinds in the first quarter of 2026, with demand dropping sharply while transportation costs continued to climb, putting heavy pressure on distributors and traders across the country.
According to Vartis, the domestic rolled steel market recorded a 35–45 percent year-on-year decline in Q1 2026, depending on region and product segment. At the same time, logistics costs increased by 15–20 percent during the quarter, creating a difficult operating environment for market participants.
Serhiy Kovalenko stated that January and February were among the weakest sales months the company has experienced since 2022, with the steepest demand declines recorded in central Ukraine and in Kyiv.
The downturn was mainly attributed to:
- Prolonged power outages
- Adverse winter weather affecting construction activity
- Limited government funding for major infrastructure projects
Meanwhile, supply continued to outpace demand. Many steel traders entered 2026 with elevated inventory levels built up in anticipation of stronger consumption, leading to oversupply and intensified price competition.
Market pricing also came under pressure, with operators facing falling selling prices, increased dumping activity, and shrinking margins.
Logistics costs worsened further after February. By April, transportation expenses had reportedly risen by 40–50 percent compared to the start of the year, driven by higher fuel prices, disrupted routes, and broader wartime operating conditions.
Despite the weak start, market participants remain cautiously optimistic. Planned European financing of approximately €90 billion for Ukraine’s reconstruction during 2026–2027 is expected to support future steel demand, particularly in:
- Energy infrastructure restoration
- Protective fortifications
- Shelter and defense construction
Industry sources expect stronger demand to emerge in the second half of Q2 and continue through Q3 if project financing is released as planned.
VietnamSteel by Hoa Sen Group
