Ukrainian steel industry hit by rising tariffs, scrap exports, weak markets, and lack of protection – Kamet Steel CEO
Ukraine's steel industry is suffering from rising electricity prices, higher rail tariffs, increased scrap exports, weak conditions on international markets, and a lack of protection for the domestic market, Kamet Steel CEO Oleksandr Tretyakov said at a meeting of Prime Minister Yuliya Svyrydenko with business leaders in Dnipro on Thursday.
Tretyakov said he participated in the meeting as part of the social dialogue, since Kamet Steel is the largest employer in Kamianske and all of these issues will inevitably affect the company's ability to sustain jobs and maintain workers' social standards.
"Today, Ukraine's steel industry is facing unprecedented challenges. Steel prices are under pressure due to poor market conditions and increased competition from China, Türkiye, and Russia. In such circumstances, it is crucial to avoid decisions that could further weaken the position of Ukrainian producers," the CEO said.
Among the most critical issues, he cited the unacceptable increase in rail tariffs. He noted that producing one tonne of steel products requires transporting about three tonnes of raw materials.
"Already today, according to our logistics teams, freight tariffs at Ukrzaliznytsia are higher than actual rates in Poland and Slovakia. Even a slight increase would significantly raise the cost of steel production and undermine competitiveness. Ukrzaliznytsia has a chronic problem of loss-making passenger transport. The request is to subsidize this social segment from the state budget (about UAH 20 billion in 2026 to cover the passenger segment's deficit), while its freight operations are profitable and do not require state support," Tretyakov said.
He also pointed out that tariffs charged by transmission system operator Ukrenergo for power transmission and dispatch services are trending upward. Draft tariffs for 2026 foresee a combined increase of $5/MWh, with some cost items appearing inflated. In an environment of weak demand and intense international competition, any rise in these tariffs undermines the competitiveness of Ukrainian exporters. He urged the government to prevent tariff hikes by Ukrenergo in 2026.
Tretyakov also flagged the rapid growth of scrap metal exports – now reaching 50,000 tonnes per month, 11 times higher than in 2022. Exporters are actively exploiting a loophole in Ukraine's agreement with the EU: scrap is shipped through EU countries, where the export duty is zero, and then re-exported to third countries such as Turkey. Before the war, scrap was exported directly from Ukrainian ports to Turkey with duties paid.
The CEO underscored that scrap is a strategic raw material. Processing one tonne of scrap into rolled steel in Ukraine generates about UAH 15,000 in taxes and fees, as well as roughly $1,200 in foreign exchange earnings from exporting high value-added products. In contrast, direct scrap exports with zero duty bring minimal tax revenues, as the market is partly gray or shadow, and yield only $250–350 in foreign currency receipts.
"This inflicts massive damage on the economy: we lose billions of hryvnias in tax and customs revenues. But even more dangerous is that the country is losing a strategically important resource that will be critical in the context of the green transition in Ukraine and the European Union. Every tonne of scrap is already worth its weight in gold," he warned.
Tretyakov reminded that a formal duty of EUR 180 per tonne on scrap exports exists but is not being enforced. As a temporary wartime measure to maximize budget revenues and foreign currency earnings, he proposed banning scrap exports to countries where the duty is not applied.
The CEO also stressed the need to protect the domestic market from imports amid shifting global trade flows. "Already today, we are recording growth in imports of steel products that are also manufactured by Ukrainian companies. The reasons are clear: tighter trade restrictions in the U.S. and EU are forcing producers from third countries to seek less protected markets. Ukraine is becoming one of those markets," he said.
He added that with the EU's Carbon Border Adjustment Mechanism (CBAM) taking effect on January 1, 2026, and potential changes to EU protective measures replacing existing steel safeguards, risks for Ukraine's market will increase.
"We see a real threat of massive dumping by China, Turkey, and Russia (through friendly countries circumventing sanctions) on the Ukrainian market. Dumping means a decline in domestic production, job losses, and lower tax revenues for the budget. That is why we are calling on the government to adopt effective protective measures so Ukrainian producers are not forced out of their own market," Tretyakov appealed to the prime minister.
As reported, Prime Minister Svyrydenko said after the meeting that the issue of ensuring electricity costs for Ukrainian industry that are competitive with those abroad requires further discussion.
Kamet Steel is part of the Metinvest Group.