Ukraine's steel industry is facing severe operational and financial challenges, while decisions on restarting damaged facilities will depend primarily on Russian attacks, access to ports and European Union trade restrictions, according to Oleksandr Vodoviz, head of the CEO's office at Ukrainian mining and steel group Metinvest Group.
Speaking at Forbes Ukraine's Economic Resilience Forum in Kyiv, Vodoviz said Ukrainian steelmakers have suffered repeated damage to their facilities, with production currently halted at Metinvest. He added that during one week in September Ukraine did not produce any steel for the first time in 100 years.
Restarting damaged blast furnace would require at least $50 million
According to Vodoviz, restarting a blast furnace at Zaporizhstal that was damaged by Russian attacks would require an investment of at least $50 million, while the blast furnace itself is valued at around $500 million. Overall investment requirements for the recovery of Ukraine's steel industry are estimated at billions of dollars.
Vodoviz identified three main factors affecting decisions on investment and the resumption of operations: continued Russian attacks, the blockade of ports limiting product exports, and EU trade restrictions, particularly the Carbon Border Adjustment Mechanism and reduced steel import quotas. Resolution of these issues would determine whether production can be restarted immediately, he stated.
Metinvest calls for support framework suitable for large businesses
Vodoviz also called for a different approach to state support for large industrial companies, stressing that Metinvest is not asking for direct government financing or grants but wants access to equal operating conditions.
Metinvest has examined around 15 government programs and financing options, but most do not correspond to the scale of large industrial companies' requirements.
Meanwhile, Ukraine's Ministry of Economy and Environment has allocated around UAH 45 billion for its programs this year, including programs previously administered by the agriculture ministry. Around UAH 95 billion is currently envisaged in the 2027 budget, with approximately two-thirds expected to comprise an insurance fund.
Vodoviz welcomed the introduction of war-risk insurance programs for businesses, noting that such mechanisms could also influence insurance and logistics costs. However, he said businesses are currently operating with very short planning horizons, generally planning one month ahead and no further than six months.
