Ukrainian Steel Output Falls 80% After Russia Targets 7 Furnaces
Key Facts
Ukraine’s steel output fell about 80% in September after Russian attacks hit 7 furnaces, Ukrainska Pravda reported, citing a study by the Centre for Economic Strategy. The study said 5 of the targeted furnaces are at Metinvest facilities, while the other 2 are at ArcelorMittal facilities. The decline comes in a sector where World Steel Association data show Ukraine produced 7.4 million tonnes of crude steel in 2025, compared with 7.6 million tonnes in 2024. The furnace shutdowns are a blow to domestic production, coinciding with difficulties transporting ore and metal products to markets. Dragon Capital estimated that halted steel production and a decline in ore mining could reduce gross domestic product by 1.5%, a potential impact rather than a decline that has already occurred.
The pressure was reflected in trade before September’s production decline: the value of metal exports fell 48% in August compared with the same month in 2025 because of logistical difficulties, according to the Centre for Economic Strategy study cited by Ukrainska Pravda. The study said the blockade had made shipping iron ore through traditional maritime routes almost impossible. It added that switching to alternative routes is extremely costly, limiting producers’ ability to offset disruption to usual routes. These obstacles impose simultaneous constraints on production and exports for mining and manufacturing. The decline in metal exports is also weighing on a sector that has made an important contribution to Ukraine’s economic activity.
The metals industry and related sectors accounted for more than 5% of Ukraine’s gross domestic product in 2025, Ukrainska Pravda reported. The impact of factory shutdowns therefore extends beyond steel output itself to activities linked to mining and exports. Dragon Capital estimated that halted steel production and a decline in ore mining could reduce output by 1.5%, an estimate reflecting the economy’s exposure to disruption in the sector. The estimate points to a potential impact on output, not a contraction recorded at that rate. The duration of the factory shutdowns and the ability of other sectors to make up for lost production remain key factors in the scale of the economic impact.
At ArcelorMittal’s facility in Kryvyi Rih, the company said it could not safely and sustainably resume operations after the plant was hit by four missile strikes in five weeks. The company said the latest attack took place on Sept. 21, and that the four strikes killed 5 people and injured 17 employees. The attacks also caused extensive damage to production facilities, according to the company’s statement. ArcelorMittal said it expects to record a non-cash impairment loss of about $1 billion, mainly reflecting a decline in the value of property, plant and equipment in Kryvyi Rih. The company thus links the halt in operations to damage to the plant’s assets as Ukrainian steel production suffers a sharp decline.
Ukrainian steel exports also face tighter European trade restrictions: lower duty-free quotas for imports of Ukrainian steel products took effect on July 1, 2026, alongside the European Union’s existing carbon border adjustment mechanism, Ukrainska Pravda reported. This adds to the difficulties in maritime transport and the high cost of alternative routes cited in the Centre for Economic Strategy study. The centre said that if steel plants remain shut throughout 2027 and other sectors do not make up for lost production, the result could be a deeper economic contraction. This scenario is conditional on continued factory shutdowns and production not being replaced. These factors put the path of production and exports in the coming period at the centre of estimates of the economic impact on Ukraine.