Ukraine's H1 2026 steel data: long-product exports down 41.7% as CBAM bites and quotas tighten

Ukrainian long-product steel exports fell 41.7 percent year-on-year in the first half of 2026, according to GMK Center, the Kyiv-based steel consultancy, which describes the industry as facing a perfect storm in its 1H 2026 review. Flat-rolled exports fell 8.1 percent, crude steel production slipped 3.0 percent, and iron ore production dropped 18.8 percent over the same six months.

The dataset is the first full half-year measurement of what the CBAM definitive phase, in force since January 1, 2026, has done to the mechanism's most exposed steel supplier. The EU takes 85 percent of Ukraine's finished long-product exports, per GMK Center, so the long-product collapse is in effect a European market story. The full exposure picture, from carbon intensity to the accession paradox, sits in the CBAM Ukraine country guide.

What the H1 2026 scoreboard shows

GMK Center's H1 2026 data records long-rolled exports down 41.7 percent, flat-rolled exports down 8.1 percent, crude steel production down 3.0 percent, and iron ore production down 18.8 percent, all year-on-year. The six headline indicators are set out in the table below.

The half-year figure hides a front-loaded collapse. GMK Center's monthly export reporting shows the cumulative decline in long-product exports deepening through February and then easing:

• January: down 62 percent year-on-year
• January to February: down 64.4 percent
• First quarter: down 60.5 percent
• January to April: down 55 percent
• Full first half: down 41.7 percent

The deepest damage came in the weeks immediately after the definitive regime started, and later months clawed part of it back. The half still closed with long-product volumes at under 60 percent of the 2025 level, while production remained exposed to what GMK Center lists as missile and drone attacks, power disruptions, staff shortages, and damage to industrial and transport infrastructure.

Why long products fell hardest: the €58 versus €18 cost gap

GMK Center estimates CBAM charges of about €58 per tonne for Ukrainian steel, based on an average carbon intensity of 2.1 tonnes of CO₂ per tonne, against about €18 per tonne for competitors producing in electric arc furnaces. That €40 gap is the structural disadvantage behind the long-product number: Ukrainian output remains dominated by the blast furnace route, and GMK Center's analysis argues the production structure cannot be changed quickly and would require investments measured in billions of dollars, an unrealistic proposition for plants operating under wartime conditions.

The per-tonne figures describe the mechanism's full weight rather than the 2026 cash cost. This year the CBAM factor stands at 2.5 percent, with free allocation covering the remaining 97.5 percent, so the certificate cost on a tonne of Ukrainian blast furnace steel comes to under €4 at the Q2 2026 certificate price of €75.28/tCO₂e. The commercial damage runs ahead of the cash cost because EU buyers are contracting against the escalation path to 2034, not against this year's bill. Importers weighing Ukrainian material against EAF alternatives can model both routes in the CBAM cost calculator.

The quota layer: country volumes set 60 percent below 2025 deliveries

The EU's new tariff-rate quotas, applied from July 1, 2026, grant Ukraine country-specific volumes that GMK Center calculates at 60 percent below actual 2025 deliveries in the covered categories. The H1 export decline happened before those quotas took effect, which is what makes the second half look worse than the first: the new regime stacks a volume cap on top of the carbon cost that drove the 41.7 percent fall. Two categories illustrate the cut.

GMK Center expects the new quotas alone to remove 1.3 to 1.5 million tonnes of Ukrainian steel exports per year against 2025, cutting finished-product deliveries to the EU by roughly 50 to 60 percent and costing between $850 million and $1.1 billion in annual export revenue. Its longer-range research, reported when quota cuts plus CBAM triggered formal exemption appeals in August, projects total steel export losses of $1.75 billion and cumulative CBAM payments of €1.2 billion over 2026 to 2030 if nothing changes.

The pressure also runs in the opposite direction. While Ukrainian mills lose their main export market, imports of long-rolled products into Ukraine surged 64.0 percent in H1 2026, with Türkiye and China the main suppliers. GMK Center attributes their edge to lower energy costs, more stable operating conditions, and access to cheaper raw materials, including Russian semi-finished products. Ukrainian producers are being squeezed out of the EU and undercut at home in the same six months.

Production forecast now points below the wartime low

GMK Center forecasts Ukrainian steel production of 6.5 million tonnes in 2026 and 5.8 million tonnes in 2027, and the 2027 figure would fall below the 6.2 million tonne low recorded in 2023, the first full year of the invasion. An earlier GMK Center forecast had put 2026 output at 7.2 million tonnes, roughly flat against 2025, so the revised outlook amounts to a downgrade of about 0.7 million tonnes for this year. The forecast assumes EU trade restrictions, both CBAM and the tariff-rate quotas, stay in place.

The comparison point is the harshest available. In 2023, output was constrained by occupied and destroyed capacity, including the loss of the Mariupol plants. The 2027 projection says the combined trade regime would push production below what full-scale war achieved, with the H1 crude steel decline of 3.0 percent marking the first step down that path.

What the numbers change for the exemption debate

The H1 dataset converts the Ukrainian exemption argument from projection to measurement, and it lands just as the European Parliament's September plenary prepares to fix its negotiating mandate for the autumn trilogues on the CBAM review. Ukrmetallurgprom and the Federation of Employers of Ukraine formally petitioned Kyiv in August to seek relief, and Pascal Lamy's proposal for a Ukraine CBAM exemption tied to decarbonisation milestones remains the most developed design on the table. Neither co-legislator's position currently contains a Ukraine provision, and EU institutions have refused relief three times since December 2025, twice at the Commission and once in the ENVI committee's review position.

Ukraine's own regulatory answer is also unsettled: four competing ETS draft laws are before its parliament, and a functioning domestic carbon price is the one lever that would let Ukrainian producers deduct a carbon cost already paid at home.

For EU importers of Ukrainian steel, nothing changes today. Certificate obligations accrue against 2026 imports at the quarterly certificate price, sales open on February 1, 2027, and the first declaration falls due on September 30, 2027. What the H1 data changes is the supply side of that calculation: the volumes available to import are shrinking faster than the mechanism's cash cost alone explains.