Ukraine’s steel industry halted production following Russian attacks in recent months, compounding deep export losses alongside a reduction in European Union steel quotas that threatens the sector’s post-war recovery.
Missile Strikes and Infrastructure Damage Halt Production at Key Steel Mills
Metinvest Group CEO Yuriy Ryzhenkov, who has led his 33,700-person firm through the conflict, noted that these recent Russian strikes were far larger in scale than previous attacks and successfully halted production at key plants.
Because lost power and damaged critical infrastructure mandate immediate shutdowns to prevent industrial catastrophes, missiles hit facilities, and Ukraine’s entire steel industry effectively stopped operating. In the first days of September, Russian ballistic missile strikes knocked out Ukraine’s last three plants accounting for 90% of the nation’s steel production, and Ukraine’s largest steel mill confirmed it would not resume production while seaport blockades are active that Ryzhenkov noted are more severe now than they were in 2022.
Trade Barriers and Military Strikes Squeeze Economic Output
Even after some production capacity was lost and its contribution declined, the sector still accounted for more than 7% of gross domestic product and more than 20% of exports.
| Economic Indicator | 2021 Level | Recent Level |
|---|---|---|
| Steel Production | 21 million metric tons | 7.4 million metric tons |
| Export Value | $22 billion | $6 billion |
| Tax Revenues | $3.5 billion | $870 million |
The European Union decided to cut quotas for Ukrainian steel by more than 50%. Ryzhenkov criticized the policy directly when speaking to policymakers in Brussels.
Pointing out that quotas allocated this year compared to supplies from last year represent a 60% reduction at a time when ports were already closed and alternative options do not exist, the Metinvest CEO told policymakers that this choice will destroy one of the important pillars of the Ukrainian economy. Ryzhenkov also stated that more than 8,500 Metinvest employees have been mobilized into Ukraine’s Defense Forces, with over 8,000 of his personnel fighting Russian forces while the company continues supporting the military units that rely on them.
Executives Warn of Industrial Collapse Without Markets and Investment
Ukrainian steel executives warn that the sector faces an existential tipping point that degrades steel supplies to the Ukrainian armed forces.
“There is pretty much no future without a market to which you can sell.”
Yuriy Ryzhenkov, CEO of Metinvest, via Fortune
When asked whether the world is witnessing the end of steelmaking in Ukraine, Ryzhenkov stated that if nothing is done, it is almost inevitable. He added that shutting down steel plants would hit especially hard in cities whose economies developed around industry, noting that if the steel plants are shut down, the economies of those cities will largely shut down as well. Metinvest is not abandoning its international projects, continuing to pursue opportunities in Europe, the Mediterranean, and the Black Sea region while planning to reestablish vertical integration with Ukrainian businesses in the future.