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Agriculture and steel remain important – though much reduced – pillars of Ukraine’s economy and, as of 2024-2025, agriculture accounts for about 7-8% of UKraine’s gross domestic product (GDP), generating more than half the country’s export revenues, according to Organisation for Economic Co-operations & Development (OECD), while the mining and metals sector contributes roughly 5.7-7.2% of GDP – despite both sectors facing significant disruption due to the ongoing war.
After partial normalization of trade flows, the fourth year of the attempted invasion has proved to be more challenging, with the country’s energy system and infrastructure under continuous Russian bombardment since November, adding renewed pressure to the market.
Agricultural export flows are currently at the lowest level since the start of the war, despite higher year-on-year production, while the steel industry has been subject to emergency stoppages and high electricity prices.
While in 2024 trade sources said they were able to conclude some forward contracts as agricultural exports had largely normalized under the Ukrainian-controlled humanitarian corridor, 2025 has shown that not all risks can be anticipated. Trade is once again concentrated mainly on nearby loading periods, with power shortages – combined with intensified attacks on port infrastructure – further slowing already constrained operations.
In terms of grain prices, logistical constraints have provided underlying support, even with external markets being neutral or bearish. In addition, emergency trading conditions – such as export terminal disruptions or power shortages affecting infrastructure and delaying cargo deliveries to ports – have prompted buyers to pay premiums to secure prompt execution, further underpinning prices.
Additionally, the fact that during December-early January the attacks were particularly seen on the vegoil crushing capacities or facilities, which pushed up sunoil prices, not just in Ukraine, but worldwide, given that Ukraine along with Russia are the world biggest suppliers of that product.
Oilseed processing activity was further hampered by intensified attacks on crushing plants and port infrastructure, alongside persistent electricity shortages that forced several facilities to be temporarily idled.
In September-January, sunflower crush was just 4.7 million tonnes – 9% below the already weak 5.2 million tonnes recorded a year earlier and well under the five-year average of 6.3 million tonnes for this stage of the season. This represents a 26% shortfall versus the five-year norm and marks the lowest level seen in 12 years, reinforcing supply tightness in the domestic and export markets.
Policy measures, meanwhile, have begun reshaping the broader oilseed balance, with the Ukrainian government introducing an export tax of 10% for rapeseed and soybeans, which has stimulated domestic processing of those commodities and redirected more value-added production inside the country to partially offset the structural weakness in the sunflower segment.
In terms of export destinations, the European Union has lost its position as the key importer of Ukrainian grain, with the trading bloc not extending the agreement from the start of the war, under which grains could be imported without limitation.
Wheat exports to the EU are now limited by an annual quota of 1.3 million tonnes and barley exports have been restricted to 450,000 tonnes per year, while corn is still free to be imported openly until the CIF Rotterdam for US corn price drops to a certain level (€157 per tonne), which is currently a long way off, sources said.
The cut to the wheat import quota into the EU from 3.8 million tonnes in January-February 2025, to the current 553,000 tonnes for the first two months of 2026. Corn imports to the EU from Ukraine also declined, because, while Ukrainian corn prices held steady, global prices were much more competitive, with other markets taking a big part of Ukraine’s market share. Thus, EU corn imports from Ukraine in the first two months fell to 4 million tonnes, compared with almost 8 million tonnes a year earlier.
Ukraine has continued to work with its traditional markets in North Africa and Middle East.
In late December-early January major steelmaking assets in Ukraine were subject to widespread power outages caused by Russian drone attack on Ukraine’s energy infrastructure.
To avoid long-lasting blackouts across the country, which civilians and businesses constantly withstand, industrial enterprises have been importing energy – despite the fact that it increases the costs of production.
Compared with 2024, the price of electricity has increased from $135 per megawatt hour (MWh) to $210 per MWh in January 2026, according to ArcelorMittal Kryvyi Rih (AMKR).
While Ukraine continues to benefit from an exemption from the EU’s steel safeguard measures, its exports remain fully exposed to the Carbon Border Adjustment Mechanism (CBAM) a climate policy tool designed to put a fair price on carbon emissions embedded in certain imported goods, which came into force on January 1, 2026.
And while local steelmakers consider CBAM legitimate and necessary mechanism, they regard the timing of its application to Ukrainian industries as particularly unfavorable.
“As an immediate result of CBAM coming into effect, AMKR lost exports to the EU that amount to half of our annual production – more than 1.25 million tonnes,” AMKR chief executive officer Mauro Longobardo said in January, with the company forced to close its blooming shop because it “has no orders to the EU any more.”
Since the beginning of the war the EU markets have been absorbing the bulk of Ukraine’s steel exports. But according to market participants, the additional carbon-related costs and compliance burdens introduced by CBAM – the European Union Allowance (EUA) is the main carbon-credit currency in the EU Emissions Trading System (EU ETS) and represents the right to emit one tonne of carbon dioxide equivalent, for instance – undermine the sector’s competitiveness at a time when access to Europe is economically vital.
Ukraine’s rolled steel output totalled 6.52 million tonnes in 2025, which is up by 4.8% compared with 2024, according to Ukrainian Steel Association Ukrmetalurgprom. But that amounted to a severe slump in production compared with before the attempted invasion, down by 65.83% compared with 2021’s 19.08 million tonnes.
Of the 2025 total, 4.12 million tonnes, or 63.2%, was exported, with the EU taking 82% and other European countries 8.5%, according to Ukrainian customs statistics.
Flat steel exports rose by 11.1% year on year to 1.82 million tonnes and long steel exports surged by 45.4% to 893,000 tonnes, while semi-finished steel exports amounted to 1.42 million tonnes, down by 26.5%.
Finished steel imports from Russia to the EU were banned in 2022 and HBI and pig iron from 2026, with majority of steel companies or their shareholders sanctioned by Western countries, leaving Russia little options for its exports but to look to cheaper markets. But while Russia-origin slab is subject to quota limits, European re-rollers still rely heavily on Russian slab imports (see table below).
However, the recent EU policy updates suggest that situation might change in 2026, and slab trade flows might also be banned before its 2026 quotas expire.
In January 2026, European Parliament voted in favour of new trade regime for the steel sector to replace current safeguard measures.
While the new regime is mainly focused on finished steel products imports and reconfirms the ban of Russia- and Belarus-origin finished steel import into the EU, several sources told Fastmarkets that steel semis might also be affected and, according to one market participant, Russian steel slab is also highly likely to be completely banned before the quota period expires on July 1, 2026.
The proposal must still be approved by the European Council and the European Parliament’s International Trade Committee (ITC) has approved a decision to start negotiations with the Council, with the intention of reaching a deal on the final form of the Bill this spring, according to the European Parliament.
In November 2025 the ITC announced its intention to certificate the origin of all covered imports by introducing “melt and pour requirement.”
Under the EU rules, importers will have to demonstrate a steel’s “melt and pour” origin – that is, the country where the steel was first melted in a furnace and cast into its initial solid form. This “solid form” refers to the steel’s earliest shape after cooling, such as a slab, billet, ingot or another primary semi-finished block.
Put simply, it is the location where the steel first becomes a solid product, before any subsequent rolling, coating, cutting or other downstream processing. The aim is to prevent steel produced in certain countries from being reclassified following only minimal processing elsewhere.
The draft legislation also strengthens verification requirements by specifying a wider range of acceptable supporting documents, including mill test certificates, invoices, delivery notes and long-term supplier declarations.
In one of the most far-reaching additions, the European Parliament has also proposed an automatic ban on all products made from steel melted and poured in Russia or Belarus, rendering such shipments ineligible for quota access and subject to immediate refusal at the EU’s borders.
The same draft proposes that imports originating in Ukraine be fully exempt from both quotas and duties for as long as the country faces an “exceptional and immediate security situation” – Russia’s attempted invasion.
But Europe relies almost entirely on steel slab imports and Russia and Ukraine were the largest suppliers before Russia’s attempted invasion and total slab imports into the EU amounted to 6.5 million tonnes in 2021, with deliveries from Russia and Ukraine accounting for 6.07 million tonnes (93%) of the total, according to Global Trade Tracker (GTT) statistics.
Ukraine is no longer able to supply steel slab, since losing its major assets in Mariupol – Metinvest’s plants at Azovstal and Ilyich Iron & Steel. Slab was supplied mainly form Azovstal, but as a result of Russia’s attempted invasion, Metinvest lost control of both assets.
In October 2022, in response to the attempted invasion, the EU imposed quota limits, which were expected to last for two years, on Russian semi-finished steel products. But in December 2023, the quotas were extended until September 30, 2028, following a lobby campaign led by rerollers in Italy, Belgium and the Czech Republic, where steelmakers have traditionally relied on Russian semi-finished steel.
In addition, Russia’s largest steelmaker, Novelipetsk Iron & Steel (NLMK), owns re-rolling assets in Belgium, Denmark, Italy and France.
The Russian Federation’s slab import quotas into the EU were fully used in the previous quota window, from October 1, 2024, to September 30, 2025 and for the next window – running from October 1, 2025, to September 30, 2026 – the quota was set at 2.998 million tonnes.
In 2025, the EU countries imported more than 5 million tonnes of steel slab, with 60.6% of that – about 3.5 million tonnes – supplied by Russia.
After 2022, some minor tonnage of slab deliveries from Ukraine were reflected in statistics, but sources said those were deliveries from stock.
“Slab deliveries from Ukraine after 2022 are tonnages from the warehouses,” a source told Fastmarkets.
The Russian grain market also underwent massive shifts in the fourth year of the full-scale war started by the country, but they were largely driven by domestic policy and global market dynamics rather than by any external factors.
Unlike the metals and steel sectors, agricultural commodities have not been subject to broad sanctions. Although a limited number of agribusiness companies were sanctioned, this has not materially affected export flows or Russia’s position in the global grain market.
While grain production – particularly wheat, the country’s key export commodity – increased year on year, mainly due to more favorable weather, exports are lagging by at least 8% compared with last season.
Apart from market conditions, while Russian wheat prices were sometimes higher than equivalents from the EU or other big supplying countries, another two reasons were adverse weather in the ports combined with significantly intensified security checking by the Russia’s Federal Security Service.
This has led to shipment delays, with particularly long waiting times for cargoes transiting the Kerch Strait between the Azov Sea and the Black Sea. One of the recent measures introduced by the Russian government was an entry ban on vessels that had called at Ukrainian or EU ports in their previous 10 voyages.
This forced vessel owners to choose between operating in the European/Ukrainian market or shifting to the Russian market, raising concerns that Ukraine could face a tighter vessel supplies than Russia.
In terms of destinations for Russian wheat, some markets saw a decline amid stronger competition from other origins, such as Algeria and Bangladesh, while exports increased significantly to certain destinations – notably Iran, where Russia has officially begun selling on a government-to-government basis, and Turkey, which lifted its wheat import ban just ahead of the start of the 2025/26 marketing year in July.
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