Ukraine produced no steel at all last month, Oleksandr Kalenkov, president of the steelmakers’ association Ukrmetalurhprom, says, according to Ukrainian Radio. Russian missiles have destroyed the blast furnaces at its plants, stopping an industry that ran for more than 150 years.

At its peak, Ukraine smelted more than 42 million tons of steel a year, more than a third of what the entire EU produced last year. Before the full-scale invasion, steel and mining earned over a third of Ukraine’s exports and up to 12% of GDP. With the furnaces down, the country now risks losing billions of euros in export earnings, tax revenue, and thousands of jobs, Kalenkov warns.

“What is happening now is not just a hard or critical situation. It is a tragic situation when an industry more than 150 years old produced zero steel last month,” Kalenkov says.

The collapse is the end of a long descent. Output fell from more than 40 million tons to 22 to 23 million after 2014, and to 7.5 million last year, Kalenkov says. Fifteen years ago, the sector earned half the country’s foreign currency.

Steel remains Ukraine’s second-largest foreign-currency earner, employing more than 70,000 people directly and paying close to $1 billion a year in taxes.

A pillar knocked out piece by piece since 2014

The war has chipped at the industry for more than a decade. Ukraine lost about a third of its capacity after 2014, along with almost all its coking-coal mines. It later lost the last one, the Pokrovske mine, too. In 2022 it lost the Mariupol production site, more than 40% of what Ukraine then made, he recalls.

Even the plants left on government-controlled land have worked in survival mode since.

In 2021, the last year before the invasion, the mining and metals complex still accounted for more than a third of all exports and accounted for up to 12% of GDP, rising above 40% of regional output in Zaporizhzhia, Donetsk and Dnipropetrovsk oblasts.

The strikes that finished the furnaces

The decisive blow came from the air. Since August, a huge number of missiles, both ballistic and cruise, have targeted the plants, and practically all the blast furnaces still working were destroyed, he adds.

Ukraine’s largest steelworks, ArcelorMittal Kryvyi Rih, began a cold shutdown after four Russian attacks that killed six workers and halted primary steel production.

Kalenkov’s figure differs from one his association gave earlier: Ukrmetalurhprom reported that Ukraine’s steel output fell 4.7-fold year on year in September, to 131,000 tons, NV reported. It is not clear whether Kalenkov meant September or a narrower measure.

ArcelorMittal Kryvyi Rih has begun the process of placing its plant in cold shutdown following four Russian missile attacks, the company said on 10 October. The attacks killed six workers, injured more than 18 others, and forced the suspension of primary steel production.

ArcelorMittal Kryvyi Rih is Ukraine’s largest steelworks, so its shutdown adds to the pressure on an industry already hit by Russian attacks and disrupted exports.

ArcelorMittal Kryvyi Rih CEO Mauro Longobardo said the company’s priority was to protect workers and industrial assets. He said the ArcelorMittal Group would remain in Ukraine, but that its assessment was that safe operation was impossible while the war continued.

Workers and the city

As of July, ArcelorMittal Kryvyi Rih and its subsidiaries employed about 17,000 people, local outlet Pershyi Kryvorizkyi reported. On 29 September, the outlet reported that the company had not said how many workers could lose their jobs and was assessing its staffing needs after production stopped. It also said municipal water and heating utilities had about 1,000 vacancies and had been instructed to help ArcelorMittal workers find jobs. The outlet noted that it was unclear whether the vacancies were new and that the announcement did not specify the roles or salaries.

In late September, Kryvyi Rih defense council head Oleksandr Vilkul wrote on Telegram that the city would cut spending and stop a number of projects as tax revenues fell. He attributed the pressure to Russian attacks and the inability to export through seaports, and said several major industrial facilities were idle, including ArcelorMittal Kryvyi Rih and three mining and ore-processing plants.

September steel output down 4.7-fold

Ukraine’s steel production fell 4.7-fold year on year in September, to 131,000 tons, the steelmakers’ association Ukrmetalurhprom said, NV reported. Metinvest chief operating officer Oleksandr Myronenko told Forbes Ukraine on 15 September that the group would declare force majeure on some contracts after Zaporizhstal and Kametstal halted operations.

An expected $1 billion impairment

The ArcelorMittal Group said on 25 September that it expected to record a non-cash impairment of about $1 billion, mostly related to property, plant, and equipment. It also said it had provided more than $700 million in financial support to its Ukrainian business.