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Russia has stepped up attacks on metallurgical enterprises in Ukraine, on top of rising rail tariffs and a blockade of the ports. The sector has plunged into a deep crisis. How much steel production has fallen, what measures are needed to save metallurgy, and how the government can help — read in the RBC-Ukraine piece. Key points: Escalation of attacks on metallurgical plants. Due to hostile strikes, Zaporizhstal and Kametstal have already stopped operations; overall, four enterprises have been hit. Crisis in the mining and metallurgical complex. Because of port shutdowns and rising logistics costs, steel production in August fell by 2 times. Support for the sector. The government must take a number of domestic steps (insurance, lending, anti-dumping investigations) and expand access for Ukrainian metal products to the EU market. Stabilizing Ukrzaliznytsia tariffs. This is a priority issue that will require help from international partners. Current government initiatives. The Ministry of Economy is working on improving the conditions of the carbon tax and is preparing a program to insure industrial war risks. Cabinet resolution for metallurgists. The government should adopt a standalone document that will set the framework for saving the sector and give investors confidence. The perfect storm for metallurgy During August–September, Russia significantly intensified attacks on Ukraine’s metallurgical enterprises. In August there were two attacks on Zaporizhstal (part of the Metinvest group). After a repeated ballistic missile strike that took place on 27 August, the plant was forced to stop operations. As a result of the two attacks, company employees were killed, more than 20 people were injured, and the power and transport infrastructure as well as blast-furnace and coke production were damaged. In mid-last month the Russians attacked Ukraine’s largest metallurgical enterprise — ArcelorMittal Kryvyi Rih. The attack killed two people; 13 employees and contractor staff were wounded, and the plant partially suspended operations. On 12 September the Russians again launched ballistic strikes on Zaporizhstal and the Kryvyi Rih plant. Thus, the enemy stopped or limited operations at two plants that together produce more than 70% of Ukraine’s steel. In early September the Russians attacked Kametstal (Kam’yanske, Dnipropetrovsk region, part of Metinvest); there were also fatalities and injuries among employees, the sinter production, power and transport infrastructure were damaged, and the complex completely stopped operations. On the night of 5 September the Dnipro Steel Plant, part of the DCH group of Oleksandr Yaroslavskyi, was also attacked. In that case there were no casualties, but administrative and industrial facilities were damaged. To date, according to public data, Zaporizhstal and Kametstal have completely stopped operations, comments RBC-Ukraine the analyst at GMK Center, PhD in Economics Andriy Hlushchenko. In August–September the Russians struck Zaporizhstal (photo: company press center) Within Metinvest only the Central and Northern mining and processing plants are now operating (at 50% capacity). The Southern MPP is stopped because of the ports’ blockade; Inhulets was mothballed earlier due to high electricity costs, Metinvest Chief Operating Officer Oleksandr Myronenko told Forbes. Even before the new wave of strikes, at the end of July exports of iron ore and metal products through the ports of Greater Odesa (Chornomorsk, Odesa and Pivdennyi) stopped. After that the sector began to arrange alternative logistics — rail routes via the western border of Ukraine, exports through Danube ports and road deliveries. Alternative routes can carry at most 50% of the products previously shipped through the ports of Greater Odesa, Hlushchenko says, adding that metallurgists must compete with agricultural producers for available capacity. Therefore, the throughput of alternative routes will likely be even lower. To the attacks and maritime blockade should be added the Ukrzaliznytsia tariff increase, high electricity costs, quotas and the carbon border adjustment mechanism (CBAM) for access to the EU market. The Ukrainian mining and metallurgical complex is now in a perfect storm, says RBC-Ukraine Member of Parliament and Deputy Chair of the Parliamentary Committee on Economic Development Dmytro Kysylevskyi. Also read: How much resilience do metallurgists have left? As a result, in August steel and rolled metal production fell by 2 times compared with August 2025 — to 277 and 270 thousand tonnes respectively, according to data from the industry association Ukrametalurhprom. Over 15 days in September, exports of iron ore and ferrous metals by rail decreased by 2,5 times compared with the same period in 2025, RBC-Ukraine was told by Ukrzaliznytsia’s press center. Such a reduction in the mining and metallurgical complex’s production indicators is alarming, since last year this sector formed 6% of GDP, 13% of all foreign-currency receipts and 2,5 billion dollars in budget contributions, the Ministry of Economy and Environment reported. From January through July the state budget received 27 billion hryvnias from the sectors Extraction of iron ores, Metallurgical production and Manufacture of fabricated metal products, except machinery and equipment, the State Tax Service added. Photo: The mining and metallurgical complex is one of Ukraine’s main exporters (RBC-Ukraine infographic) The crisis in metallurgy affects other industries and reduces revenues to national and local budgets. For local budgets the hit will be felt particularly because some enterprises are city-forming. Their operations strongly affect the entire local economy, the ability to maintain social infrastructure and employment, RBC-Ukraine was told by Member of Parliament and Chair of the Committee on Finance, Tax and Customs Policy Danylo Hetmantsev. Rescue measures for the mining and metallurgical complex The interlocutor reminded that legislation already contains provisions to support affected businesses. Such companies, by decision of the Ministry of Finance, can receive tax payment deferrals. Commenting on new initiatives, Hetmantsev suggests expanding the government’s affordable lending program 5-7-9 to include large industry. "Affected large businesses are asking for access to this program, and I agree with them," he told RBC-Ukraine. The government must ensure state guarantees for metallurgists that will secure their loans. As a result of the strikes companies lost a lot of real estate that had previously been collateral for bank loans, and now the state must provide a replacement, the parliamentarian adds. It is necessary to increase funding for the state war-risk insurance program from 1 billion hryvnias (budget 2026 year) to 10–30 billion hryvnias, Hetmantsev believes. Then the program could insure the property of metallurgical enterprises, because the current limit per company (up to 30 million hryvnias) is clearly too small for mining and metallurgical projects. Also read: How did the Cabinet expand the war-risk insurance program for business? The interlocutor also draws attention to the need to expand support for exporters and programs of the National Development Institution, which provides financial instruments for affected businesses. First and foremost, negotiations with the EU should be resumed on easing the application of the carbon tax (CBAM) for Ukraine and on expanding or lifting quotas, says Dmytro Kysylevskyi. "This should have been done yesterday," supports his view Federation of Metallurgists Executive Director Serhiy Bilenkyi. The European market is a priority for Ukrainian metallurgists. Deliveries to the EU accounted for 48% of all mining and metallurgical exports in the first half of this year, the Ministry of Economy reported. Photo: Europe and Asia are the biggest buyers of Ukrainian iron ore feedstock and metal products (RBC-Ukraine infographic) Kysylevskyi proposes postponing CBAM for Ukraine at least until the end of martial law plus one year, and quotas for Ukrainian product shipments should be returned to last year’s level. Brussels should also discuss lowering transit costs across the EU, since alternative routes are much more expensive than Black Sea ports. Logistics for some cargoes has already doubled in price. In particular, pellet transport via European ports costs 50–60 dollars per tonne, making shipments unprofitable, comments GMK Center analyst Andriy Hlushchenko. It is worth restoring the “Ways of Solidarity” — transport corridors with reduced usage costs that ensure transit of Ukrainian products through the EU to world markets. Brussels could allocate 25–30 euros per tonne in compensation for European transport companies, says the president of industry association Ukrametalurhprom Oleksandr Kalenkov. The interviewees agree that long bilateral contracts for electricity supplies should be developed. As a result of the first auctions held in July, traders — rather than end industrial consumers — became the main buyers of volumes from state generation. Therefore, the mechanism of these trades should be improved going forward, Kysylevskyi believes. Also read: What’s wrong with the first auctions for long-term electricity contracts from generators? A painful issue for the sector remains the presence of metal products from Turkey and China on the domestic market. "A lot of imports are now coming from Turkey, which is re-rolling Russian slabs (large iron plates, a semi-finished product) and billets. We are effectively importing Russian metal in the form of metal products," Kalenkov says, adding that China has access to cheap Russian energy resources. The interlocutor proposes preliminarily applying anti-dumping duties on Turkish and Chinese products and starting trade investigations into why these suppliers can offer such low prices. This is necessary to protect the domestic market, which remains an important sales outlet for Ukrainian metallurgists. Experts propose refraining from further increases in energy company tariffs — Ukrenergo, regional energy companies — and accelerating the government’s repayment of debts to metallurgical companies, for example VAT refunds. The most in-demand measure remains reopening the sea, because alternative logistics cannot fully replace the deep-water ports of Greater Odesa. Russia itself is also interested in restoring commercial shipping in the Black Sea, since Ukraine’s Defense Forces have successfully limited its maritime exports of wheat, oil and oil products. Also read: How did the first-ever naval drone battle end? Negotiations with the aggressor on mutual unblocking of Black Sea trade routes could take place in October, a source in the Cabinet told RBC-Ukraine. The Russian side wants to hold elections to the State Duma (18–20 September) and only after that raise issues that might require concessions to Ukraine, the source added. Cost of rail logistics The increase in rail freight tariffs — effective from 1 August, by 30% — has been very painful for the metallurgical industry. Ukrametalurhprom proposes asking international partners to find funds for Ukrzaliznytsia. Such compensation would allow lowering rail tariffs for those enterprises that previously used the maritime route and were forced to increase exports via rail border crossings in the west of Ukraine. "A 30% discount on rail transport could be given to companies that used to ship by sea," Kalenkov says. The view is supported by Executive Director of the Ukrainian Association of Ferroalloy and Other Electrometallurgical Producers Serhiy Kudriavtsev, who proposes making such a discount temporary (for the period of the maritime blockade) and applying it to affected enterprises. Until the sea corridor is restored, it is necessary at least to refrain from further increases in rail transport costs, believes Dmytro Kysylevskyi. Also read: How will the railway operate now during air-raid alerts? The Ministry of Economy frankly says there is no budget money to compensate Ukrzaliznytsia, and the 30% tariff increase helped stabilize its financial position. Thanks to this rise, the transport company is expected to finish its 2026-th year with a financial result of minus 0,1 billion hryvnias. This is an acceptable figure for a company that suffered losses of 2,7 and 7,5 billion hryvnias in 2024 and 2025 respectively. This year the railway operator received 16 billion hryvnias from the budget reserve fund, Agriculture Minister Taras Vysotskyi reported. Thus, an external financial source is indeed needed to lower or stabilize rail tariffs. Besides tariffs, Ukrzaliznytsia must work on expanding the bottlenecks at border rail crossings, adds Serhiy Bilenkyi. Government initiatives The Ministry of Economy is collecting actual data on carbon dioxide emissions from industrial enterprises. In dialogue with the European Commission, this will allow reviewing default values — the emission amounts used for enterprises that lack actual data — and bringing them in line with real values. This step should soften the effect of the carbon levy. The government is also working on emissions verification — checking the authenticity of the figures provided by industry. This will make it possible to use actual rather than default values going forward, the Ministry of Economy told RBC-Ukraine. Ukrainian metallurgical products need broader access to the European market and a postponement of the carbon tax (photo: Getty Images) The ministry sent the European Commission a position stating that Ukraine should be excluded from the mechanism that restricts steel imports to the EU and shared the view that European quotas should be reviewed. Dialogue with the European Commission is ongoing, the ministry added. Now, in the fifth year of the full-scale war, Ukraine still does not have a war-risk insurance program for large industrial projects. This fact was acknowledged on 15 September at an event of the European Business Association by Minister of Economy and Environment Oleksandr Kravchenko. To create such an instrument, the state proposes increasing VAT by 1% (to 21%), raising about 1 billion dollars from this and requesting an additional 1–2 billion dollars from international partners. With these funds, from next year it is planned to launch property insurance for companies with coverage limits up to 10 million dollars. Also read: Budget crisis in full swing. Who still has money? A direct budget allocation specifically to support metallurgy is unlikely given overall budgetary problems, sources in the government told the publication. The need for a standalone government resolution The depth and breadth of the metallurgical sector’s problems require not isolated initiatives but a package solution — a resolution that will create a framework for many executive authorities involved in the process, industry representatives say. For example, the Ministry of Energy and the National Commission regulating energy and utilities should work out the cost and availability of electricity for industry; the Ministry of Foreign Affairs and the Ministry of Economy should negotiate with the EU on quotas, the carbon tax and access for metallurgical companies to European recovery funds. No single body can solve the complex problems. Without a single document with defined responsibilities and timelines, each issue is considered in isolation and, as a result, hangs unresolved, ArcelorMittal Kryvyi Rih representatives say. A government resolution will send a signal to investors, creditors and international partners that the state treats the sector’s problems as strategic. In the absence of such a document, negotiations with the EU can often be met with the argument that Ukraine itself does not consider supporting metallurgy a priority. A formalized government position removes that argument, the company’s representatives explain. Photo: A comprehensive government document will signal to investors and set a framework for further actions by the executive branch (RBC-Ukraine infographic) The document should include provisions to start negotiations with the European Commission on expanded access for Ukrainian metal products to the European market and to begin anti-dumping investigations into supplies to the domestic market from China and Turkey, proposes ArcelorMittal Kryvyi Rih CEO Mauro Longobardo. The resolution should provide for stabilizing Ukrzaliznytsia and other logistics tariffs, set special reservation conditions for metallurgical workers to preserve the sector’s workforce. It is important to continue the practice of long-term electricity procurement contracts from generators, but define a clear priority — first and foremost ensuring industrial enterprises. Legislation should replace the citizenship criterion for the ultimate beneficiary owner with a criterion of absence of ties to the aggressor country, and revise the credit limits of the Decarbonization Fund so that they correspond to industry needs. This will allow industrial companies to unlock access to decarbonization instruments for recovery after attacks, Mauro Longobardo added. The list of measures could also include introducing the status of an affected enterprise specifically for metallurgical companies. However, this will only make sense if specific support mechanisms exist, so those mechanisms should be the government’s priority today, Kysylevskyi emphasizes. Due to military and economic factors, Ukrainian metallurgy has fallen into a deep crisis. Given the sector’s importance to the national economy and the scale of its problems, the government must propose a set of measures and unite them in one document. A Cabinet resolution should set the framework for the entire state apparatus to protect metallurgists’ interests both on the domestic market and internationally. Alongside economic policy, a state priority must remain the physical protection of facilities, continuously strengthening air defense to counter aerial attacks. The security of large industrial complexes deserves special attention. Business must be confident in the physical protection of its assets; without that assurance, new investments and economic incentives lose their point. Q&A (FAQ): – Which metallurgical plants were hit by Russian attacks? – In August–September Zaporizhstal, ArcelorMittal Kryvyi Rih, Kametstal and the Dnipro Steel Plant were attacked. The strikes caused deaths and injuries among employees and damaged power and transport infrastructure. – How much did steel production fall? – In August steel production in Ukraine fell by half compared with August 2025 — to 277 thousand tonnes. Rolled metal production also fell by half — to 270 thousand tonnes. – What logistics problems did metallurgists face? – At the end of July exports via Black Sea ports stopped, and from early August rail freight costs rose by 30%. Alternative logistics via western rail crossings, Danube ports and road transport can provide only up to 50% of sea exports and are more expensive. – What steps should the government take to support the mining and metallurgical complex? – It is necessary to expand the concessional lending program to large industrial projects, provide state guarantees for metallurgists’ loans, remove or increase quotas for Ukrainian companies in the EU market, and postpone the carbon tax. It is crucial to solve logistics problems — reduce the cost of transit through the EU, prevent (or roll back) further Ukrzaliznytsia tariff increases, and restore Black Sea port operations. The latter depends on negotiations with Russia. – What steps is the government already taking? – The Ministry of Economy is working to mitigate the carbon levy, is dialoguing with the European Commission to remove restrictions on Ukrainian metal products and ore, and is developing a war-risk insurance program that can cover the scale of industrial losses. – Why is a separate government resolution necessary and what should it include? – A Cabinet resolution will set a framework for the whole state apparatus, send a positive signal to investors and raise the priority of addressing metallurgy’s problems. The document should provide for expanded access to the EU market, anti-dumping investigations against Turkish and Chinese suppliers, stabilization of rail tariffs, special reservation conditions for metallurgical workers and the ability to purchase electricity from generators at an affordable price.
Document: PDF proof of the original version of the news item "Металурги під ударом. Як уряд може врятувати ключову галузь економіки". It records the publication content at the moment of the first scan, the preservation date and the source: RBC-Ukraine.
