---
title: "Ukraine is losing its metallurgy: steel production has dropped fivefold, and industrial cities are on the brink"
description: "Steel production in Ukraine in September fell nearly fivefold to 131,000 tons. Experts warn of risks to a million people and industrial cities, calling the restoration of maritime exports a key condition for saving the industry."
date: 2026-10-19T13:16:35.992Z
lang: en
url: https://xab.info/en/posts/ukraine-losing-metallurgy-steel-production-dropped
tags: [ukraine, metallurgy, steel-production, war-economy, industrial-cities, export-logistics]
author: "Andrey Kosynko"
publisher: "XAB.info"
---

# Ukraine is losing its metallurgy: steel production has dropped fivefold, and industrial cities are on the brink

![A metallurgist in a hard hat welds metal with sparks at a plant in Ukraine](https://xab.info/media/2026/10/19/ukraina-teryaet-metallurgiyu-proizvodstvo-stali-upalo-v-pyat-raz/ukraina-teryaet-metallurgiyu-proizvodstvo-stali-upalo-v-pyat-raz-1.webp)

## Key Points

- Steel production in Ukraine in September 2026 fell nearly fivefold year-on-year to 131,000 tons, with smelting practically halting by the end of the month
- The crisis was caused by a 'perfect storm': missile strikes on plants, power outages, the blockade of Odesa ports, and EU quota reductions
- About a million people including families depend on the industry; industrial cities like Zaporizhzhia, Kryvyi Rih, Kamianske, Dnipro, Nikopol, and Horishni Plavni risk becoming 'dead cities'
- Experts outline key recovery steps: restoring maritime exports, creating a special aid fund, easing EU quotas and CBAM, and establishing a war risk insurance mechanism

Ukraine's metallurgical industry is experiencing its deepest crisis since the full-scale war began. Following a series of Russian strikes on enterprises in August and September 2026, key steelmaking facilities were halted, and steel production in September dropped nearly fivefold year-on-year to 131,000 tons. For comparison, before February 2022, Ukraine produced 21.4 million tons of steel annually. By the end of September, smelting had practically ceased. According to investment house Dragon Capital, the halt in steel production and the reduction in ore mining could cost the country's economy about 1.5% of GDP.

### The "Perfect Storm": When plant strikes coincided with logistical and energy collapse

Natalia Kolesnichenko, senior economist at the Center for Economic Strategy, described the situation to RBC-Ukraine as a "perfect storm": direct missile strikes on enterprises were compounded by systemic power outages, the blockade of Odesa ports, and EU quota reductions on Ukrainian steel products. According to Metinvest, 17 ballistic missiles were fired at Zaporizhstal, resulting in the deaths of eight workers. ArcelorMittal Kryvyi Rih, after four strikes within five weeks, decided to mothball production until the end of the war. Kametstal and Interpipe's facility in Dnipro also came to a halt. Consequently, virtually all major steelmaking assets in the country stopped operating simultaneously.

### A million people and cities that "will simply die"

The consequences of the crisis have long transcended factory walls. According to GMK Center Director Stanislav Zinchenko, about 80,000 people worked directly at metallurgical enterprises, and another 250,000 depended on the industry through related production and orders. "Including families, that is practically a million people who depended on the steel industry for their livelihood," he noted. The greatest risk is borne by industrial cities whose budgets were largely formed by taxes from large enterprises: Zaporizhzhia, Kryvyi Rih, Kamianske, Dnipro, Nikopol, and Horishni Plavni. "These cities will simply die. People will leave them. It will be a social and humanitarian catastrophe," Zinchenko warned. Problems have already materialized in Kryvyi Rih, where, following the shutdown of major enterprises, city authorities moved to sequester the budget: industrial companies' taxes previously funded public sector salaries, municipal infrastructure, kindergartens, and social services. Railways, ports, machine building, and the energy sector — for which metallurgy was one of the largest clients — will suffer an additional blow.

### Maritime logistics: The bottleneck without which the industry cannot survive

According to interviewed experts, maritime logistics remains a critical problem. Without a functioning maritime corridor, Ukraine is essentially unable to export either iron ore or finished steel to the world market. Railway routes through the western border are incapable of compensating for the loss of port capacities. Ukrmetalurgprom President Oleksandr Kalenkov emphasizes that opening sea routes would at least allow the resumption of iron ore exports and support part of production. Experts cite the restoration of maritime exports as one of the primary steps to save the industry.

### What is needed for a restart: From a special fund to the abolition of CBAM

The second priority is supporting idle enterprises. Kalenkov points out the need to preserve labor collectives, reserve workers from mobilization, and provide tax relief. Experts also propose creating a special metallurgy assistance fund, similar to energy support mechanisms, and involving international partners in financing the restoration of damaged assets. A separate condition is easing Ukrainian steel's access to the EU market: postponing or mitigating quotas and the CBAM mechanism during the war. Experts consider launching an effective war risk insurance mechanism an important element, which would give companies the opportunity to invest in repairs even amid a high threat of repeated attacks. Despite the depth of the crisis, the GMK Center believes the industry can still be preserved, but this requires simultaneous security guarantees, the restoration of maritime logistics, access to the European market, and financial support from the state and international partners.

## Fact-Check & Sources

- [Украина теряет металлургию после ударов РФ: в чем нуждается отрасль для восстановления](https://www.rbc.ua/ukr/news/ukrayina-vtrachae-metalurgiyu-pislya-udariv-1792415437.html) - Primary source. Contains specific production figures (131,000 tons in September, 21.4 million tons pre-war), Metinvest data (17 missiles, 8 deaths), estimates from Dragon Capital (1.5% of GDP) and GMK Center (80,000 direct jobs, 250,000 related). All figures are attributed to specific sources but represent expert estimates rather than official statistics.
- [Трамп покупает российский дизель, пока Украина теряет порты и металлургию — NYT](https://rua.gr/news/european-news/vojna-v-ukraine/80301-tramp-pokupaet-rossijskij-dizel-poka-ukraina-teryaet-porty-i-metallurgiyu-nyt) - Contextual source. Confirms the overall picture of economic confrontation and damage to metallurgy and ports, but contains no additional figures on steel production. Used to verify the general logic of the crisis.

## FAQ

### How much did steel production in Ukraine decline in September 2026?

According to data cited by RBC-Ukraine, steel production in September 2026 dropped nearly fivefold year-on-year to 131,000 tons. By the end of September, smelting had practically halted completely. For comparison, before the full-scale invasion, Ukraine produced 21.4 million tons of steel annually.

### Which enterprises were shut down?

Zaporizhstal (according to Metinvest, 17 ballistic missiles were fired at it, killing eight workers), ArcelorMittal Kryvyi Rih (production was mothballed until the end of the war after four strikes within five weeks), Kametstal, and Interpipe's facility in Dnipro were all shut down.

### How many people depend on the metallurgical industry?

According to GMK Center Director Stanislav Zinchenko, about 80,000 people worked directly at metallurgical enterprises, and another 250,000 depended on the industry through related manufacturing. Counting families, the figure is about one million people.

### What measures do experts propose to save the industry?

Experts suggest several directions: restoring maritime exports (without which Ukraine cannot ship ore and steel), creating a special metallurgy assistance fund, preserving labor collectives and providing tax relief for idle plants, postponing or easing EU quotas and CBAM during the war, and launching a war risk insurance mechanism.

### Which cities are most vulnerable?

The greatest risk is borne by industrial cities whose budgets depend on large enterprises: Zaporizhzhia, Kryvyi Rih, Kamianske, Dnipro, Nikopol, and Horishni Plavni. In Kryvyi Rih, city authorities have already moved to sequester the budget following plant shutdowns.