The Ukrainian metallurgy sector, which has played a key role in the national economy for decades, remains an important factor in macroeconomic stability even during the period of military aggression by the Russian Federation.
This is reported by Finway
Contribution of Metallurgy to the War and Consequences of the Invasion
Before the onset of hostilities, the mining and metallurgy complex generated over 10% of the gross domestic product and accounted for a third of the country’s merchandise exports. In 2021, the share of the mining and metallurgy sector in GDP, considering related industries, reached 10.3%, while its share in exports was nearly 33%, bringing in $22.2 billion in foreign exchange earnings and about $3.5 billion in tax revenues. Metallurgy formed entire economic ecosystems: steel was the foundation for machinery, construction, energy, and defense. Workers in the sector contributed to job creation in related sectors, with one in every thirteen hired workers in Ukraine connected to this sector.
The industry had a city-forming significance for Zaporizhia, Dnipro, Kryvyi Rih, and Mariupol. At Azovstal, over 10,000 people were employed, at the Illich Iron and Steel Works — about 14,000, and at ArcelorMittal Kryvyi Rih — nearly 20,000.
With the start of the full-scale invasion, the sector suffered significant losses. The enterprises in Mariupol, which accounted for about 40% of steel production, fell under occupation, leading to a loss of 40% of cast iron exports and approximately 30% of rolled steel exports.
Current State, Investments, and Recovery Prospects
After 2024, the contribution of metallurgy to the economy decreased to 7.2% of GDP, and the export of mining and metallurgy products fell to $6.4 billion, or 15.4% of total exports. Tax revenues from the sector dropped to about $1 billion.
Despite the losses, metallurgical enterprises continue to invest in development. In 2024, capital investments reached $650 million, accounting for 18.3% of all investments in the industry and 8.3% more than in 2023. In particular, the Metinvest group allocated funds in 2025 for energy independence projects, including the construction of gas power plants for stable operation during blackouts.
“Currently, metallurgy is viewed as the material foundation for post-war reconstruction — from infrastructure reconstruction to residential construction. It meets the needs of the defense industry, including the production of armored elements, protective structures, and engineering facilities.”
The European Union remains the main market for Ukrainian steel — accounting for about 64% of exports. However, starting in 2026, the EU will implement the Carbon Border Adjustment Mechanism (CBAM), which may complicate exports for Ukrainian producers. Discussions are currently underway regarding possible exemptions or delays for Ukraine.
Forecasts suggest that steel production in Ukraine could rise to 6.7–7 million tons in 2026 (compared to 6.2 million tons over the first ten months of 2025). However, about 55% of the output will still be exported due to limited domestic demand. Among the main challenges, experts note unstable energy supply, high electricity costs, complex logistics, labor shortages, and military risks.