Russian strikes in Ukraine shut down country’s largest steel plant

Ukraine's steel industry faces imminent collapse due to relentless Russian attacks and complex international challenges. Since August, the metallurgy sector has endured at least nine ballistic missile strikes, costing steelmakers nearly $100 million, according to Oleksandr Kalenkov, president of Ukrmetallurgprom, a Ukrainian steel association.

This year marks the worst since 2022, when Russian forces destroyed Azovstal and Illich plants in Mariupol, eliminating 40% of Ukraine's steel production. Major Ukrainian steel companies, including ArcelorMittal Kryvyi Rih, Metinvest, and Interpipe, have suspended operations, with the Northern Iron Ore open-pit mine operated by Metinvest Group also affected.

While direct strikes on steel plants are a significant issue, Russia's broader campaign has also crippled Ukraine's seaports, impeding exports and imports via the Black Sea. Brussels' new trade rules and Europe's anti-carbon policies have further hampered Ukraine's ability to sell steel in the EU market, while some major metallurgy companies are ineligible for financing support from international financial institutions due to their ownership by oligarchs.

The steel industry is appealing for increased support from both international partners and the Ukrainian state, warning that without assistance, they may be forced to cease production until the end of the war, potentially lasting many years. The collapse of Ukraine's steel sector would have far-reaching consequences, driving up construction costs, fueling inflation, and hindering reconstruction efforts.

European officials, including a member of the European Parliament, are urging Brussels to review its trade policy and remove Ukraine from its tariff regime. Addressing the steel industry's challenges requires a multi-faceted approach involving financial support, logistics cost reductions, and improved access to the EU's steel market and the Carbon Border Adjustment Mechanism.