Analysts at GMK Center have warned that Ukraine may experience a significant decline in steel production, potentially impacting exports by as much as $5 billion over the next two years if the security situation does not improve.
If steel mills remain inactive, the production for 2026 could total around 4.3 million tons, which represents a 39% decrease compared to the previous year. Furthermore, projections indicate that Ukraine could cease steel production entirely by 2027.
The metallurgical crisis is expected to adversely affect the mining sector as well. A contraction in domestic demand and limited maritime export capabilities could lead to a 37% drop in iron ore production in 2026, followed by an additional 55% decline in 2027.
In a more favorable security environment from September 2026, mining companies might export approximately 1 million tons of product monthly to European countries. However, some existing capacities may remain dormant, with certain enterprises unable to resume operations.
The repercussions for foreign trade could be profound. Due to the decreased production of iron and steel, export revenues may fall by $2.5 billion in 2026, with a similar loss projected for 2027. Additionally, the steel deficit in the domestic market will necessitate increased imports, potentially costing an additional $1.5 billion compared to 2025.
Overall, GMK Center estimates that the negative repercussions of metallurgical plant shutdowns on Ukraine’s trade balance could reach approximately $6.5 billion.
The prolonged inactivity of these enterprises will also complicate and elevate the costs associated with their recovery. Without its own steel production, Ukraine will become increasingly reliant on imports for future infrastructure projects.
According to GMK Center, over the past five years, Ukraine’s largest steel companies have contributed more than 200 billion UAH, or $6.2 billion, in taxes and fees. In 2024, payments from four major metallurgical firms accounted for 1.6% of total revenues across various budget levels.
