Ukraine's steel industry is in crisis due to Russia's war and the blockade of the Black Sea. Once accounting for 10% of Ukraine's GDP and 30% of its exports, the industry has now shrunk by over 80% since 2021. Lack of access to ports and war-related issues has brought the sector to its knees, reports Reuters.
Ukraine's steel industry, once a pillar of the nation's economy, is facing unprecedented challenges. Russia's war and the related blockade of the Black Sea have resulted in a staggering loss for the industry. Before the conflict, this sector contributed to 10% of Ukraine's GDP and made up 30% of its exports.
The key issue is the near impossibility of shipping steel cargo through the Black Sea. While some have managed to send steel overland via rail, the cost has quadrupled due to tariffs. This has made it incredibly difficult for the industry to maintain its former levels of operation.
Moreover, the war has brought destruction to some of Ukraine's largest steel plants. For instance, the Azovstal factory in Mariupol experienced brutal fighting and was almost completely destroyed during Russia's siege of the city. Other plants are situated near the front lines, making their operation precarious at best.
Staffing these factories has also been a significant challenge. Roman Slobodianiuk, the director of the Zaporizhstal steel plant in Zaporizhzhia, mentioned that many workers fled in the initial stages of the war. With their families gone and over a thousand workers joining the army, the staffing levels have decreased by 20%.
Furthermore, the conflict has had a ripple effect on the steel industry’s infrastructure. Russia's attacks on Ukraine's electrical grid have compromised the plants' ability to function at full capacity. This adds another layer of complexity to an already dire situation.
However, there is a glimmer of hope. The rise in Ukraine's defense industry and the construction of bomb shelters have led to increased domestic consumption of steel. Unfortunately, this uptick is not nearly enough to offset the substantial declines in other areas.
Oleksandr Kalenkov, the head of Ukraine's steelmakers' union, summed it up succinctly: "If we do not have open sea ports, our industry will not survive, and all other industries will follow us."
The steel industry in Ukraine is grappling with a severe crisis, worsened by war and blockade. Unless access to open sea ports is restored, the future looks bleak for this once-thriving sector of the Ukrainian economy.