--- title: "Ukrainian Metallurgy on the Brink of Systemic Shutdown: 72% of Steel Production at Risk" description: "The strikes of August 11 and 16 halted Zaporizhstal and ArcelorMittal Kryvyi Rih — 72% of steel production in Ukraine. By the end of 2026, output could fall by 2 million tonnes." date: 2026-08-25T14:20:00.000Z lang: en url: https://xab.info/en/posts/ukraine-metallurgy-systemic-crisis-72-steel-production tags: [ukraine, metallurgy, steel-production, zaporizhstal, arcelormittal-kryvyi-rih, russian-strikes, export, hryvnia, ports-odesa, budget] publisher: "XAB.info" --- # Ukrainian Metallurgy on the Brink of Systemic Shutdown: 72% of Steel Production at Risk ![Liquid steel pouring at a Ukrainian metallurgical plant: 72% of steel production at risk of shutdown](https://xab.info/media/2026/08/25/ukraina-metallurgiya-sistemnyy-krizis-72-proizvodstva-stali/ukraina-metallurgiya-sistemnyy-krizis-72-proizvodstva-stali-1.webp) Ukraine's metallurgical industry has fallen into a deep systemic crisis. In August 2026, Russian strikes disabled two key enterprises — Zaporizhstal and ArcelorMittal Kryvyi Rih — which together accounted for about 72% of the country's steel production in 2025. This was reported by RBC-Ukraine, citing a LIGA.net article. The timeline for full recovery of the enterprises is currently unknown, and for Ukraine the systemic crisis means lost export revenues, higher construction costs, and additional pressure on the hryvnia exchange rate. ### Timeline of strikes on key enterprises The next blow struck the metallurgical plants directly. On August 11, Zaporizhstal's power and blast-furnace facilities were damaged, after which the plant came to a complete standstill. Metinvest, the company that owns the enterprise, called the scale of the damage unprecedented. On August 16, following another attack, ArcelorMittal Kryvyi Rih partially halted production. Thus, within five days the country's two largest steelmaking plants were simultaneously out of operation, creating an unprecedented shortage of metal products on the domestic market. ### Port blockade and the break in the logistics chain The crisis in the industry is not limited to direct strikes on the plants. At the end of July, due to shelling, maritime exports through the ports of Greater Odesa effectively stopped. For metallurgy and the mining sector this is critical, because overland logistics is significantly more expensive and cannot fully replace sea routes. Due to the port blockade and low ore prices, Ferrexpo and Yuzhnokazatsky GOK (Southern GOK) halted mining. Analysts at the specialized outlet GMK Center do not rule out further shutdowns of other export-oriented enterprises. Metinvest emphasizes: for the full recovery of Zaporizhstal, repairing the equipment alone is not enough — the entire chain from raw material supply to shipment of finished products must be working, and the critical factor for this remains the unblocking of the ports of Greater Odesa. ### Macroeconomic consequences for Ukraine In the event of a prolonged shutdown of the two plants, Ukraine risks losing about 72% of its steel production. By the end of 2026 this could mean a reduction in output of roughly 2 million tonnes. At the national level this means much more: it is precisely these plants that produce the key types of rolled metal used in construction and infrastructure restoration. If domestic metal is insufficient, it will have to be imported via more expensive routes, which will simultaneously raise construction costs and shrink Ukrainian exports. A worsening trade balance — less foreign-currency revenue from exports and greater currency demand for imports — increases pressure on the hryvnia and state reserves. Moreover, falling production means lower tax revenues, less cargo for Ukrzaliznytsia, reduced orders for related enterprises, and risks to jobs in industrial regions. ### The budget factor: 200 billion hryvnia in tax revenues at risk Over five years, the largest metallurgical enterprises paid more than 200 billion hryvnia in taxes and fees, or about $6.2 billion. As of the end of 2024, tax and fee payments by four metallurgical companies amounted to 1.6% of revenues into budgets at all levels. However, in the case of a sustained rise in tariffs of state monopolies, above all the freight tariff of Ukrzaliznytsia, and continued port blockades, the budget risks losing a significant source of revenue. The metallurgical crisis, according to LIGA.net, has already gone far beyond the industry itself: without the recovery of the enterprises and maritime logistics, it could grow into a broader blow to exports, construction, the budget, and the country's economic stability. ### Outlook and conditions for recovery At present, the timeline for the full recovery of Zaporizhstal and ArcelorMittal Kryvyi Rih has not been announced. Experts and industry representatives point out that the key condition for returning to normal output levels is not only the repair of damaged equipment, but also the restoration of safe maritime logistics through the ports of Greater Odesa, as well as the stabilization of raw material prices. Without these conditions being met, the risk that a temporary shutdown will turn into a multi-month and then multi-year one remains high. ## 🔍 Fact-Check Verification - [Украинская металлургия на грани системной остановки: под угрозой 72% производства стали](https://www.rbc.ua/ukr/news/ukrayinska-metalurgiya-mezhi-zupinki-pid-1787667421.html) - Основной источник. Детальная хронология ударов (11.08, 16.08), данные о 72% и 2 млн тонн, цитаты Metinvest, информация о портах и налогах. - [Украинская металлургия на грани системной остановки: под угрозой — 72% производства стали — СМИ](https://tsn.ua/ru/groshi/ukrainskaya-metallurgiya-na-grani-sistemnoy-ostanovki-pod-ugrozoy-72-proizvodstva-stali-smi-3155375.html) - Подтверждает ключевые цифры и тезисы основного материала. - [Украина рискует потерять 72% производства стали - СМИ](https://korrespondent.net/business/economics/4906044-ukrayna-ryskuet-poteriat-72-proyzvodstva-staly-smy) - Независимое подтверждение оценки 72% и рисков для отрасли. - [Удары РФ остановили ключевые металлургические предприятия Украины: запас прочности отрасли ...](https://www.unian.net/economics/other/udary-rf-ostanovili-klyuchevye-metallurgicheskie-predpriyatiya-ukrainy-zapas-prochnosti-otrasli-pochti-ischerpan-smi-13476390.html) - Подтверждает факт остановки предприятий и системный характер кризиса.