The Ukrainian steel industry, once a key pillar of the country’s industrial base, is now battling severe disruption due to the ongoing war with Russia. Among the largest players in the sector, Metinvest, a major steel producer owned by billionaire Rinat Akhmetov, has seen its operations severely impacted by the conflict. Yuriy Ryzhenkov, CEO of Metinvest, has underscored the necessity of securing robust post-war security guarantees in order to revitalize Ukraine’s economy, particularly if efforts to negotiate peace, potentially led by former U.S. President Donald Trump, come to fruition.
Metinvest, with its large workforce and numerous plants, remains one of Ukraine's top employers and a significant taxpayer. However, the company has suffered considerable losses due to the destruction of its steelworks in Mariupol during the siege. The company’s Azovstal and Illich steel plants were completely destroyed, and the loss of the Avdiivka coke mine further exacerbated the situation. Despite these setbacks, Metinvest continues to operate, running its remaining steel mills at partial capacity, with some facilities operating at 75% and others at 65% due to ongoing logistical challenges and the proximity of Russian forces.
Ryzhenkov expressed that the potential return of Donald Trump to the White House and his promises to end the war in Ukraine within a day bring some hope. However, he emphasized the need for clear plans and security guarantees for Ukrainian businesses and assets. The uncertainty surrounding Trump's policies adds to the already volatile situation, with many investors awaiting clarity on future peace agreements and their impact on Ukraine’s industrial recovery. The establishment of security guarantees, Ryzhenkov argued, is crucial to restoring investor confidence and ensuring the long-term stability of industries like steel, which rely heavily on secure infrastructure and stable conditions.
The steel industry is facing not only direct war impacts but also the broader challenges of global steel market fluctuations. Ryzhenkov noted that the current market cycle is at one of its lowest points, exacerbated by the war and the global oversupply of steel. Despite these difficulties, Metinvest remains one of the largest exporters of steel from Ukraine, relying on seaports in the south and rail links to maintain its export capacity. However, these logistics remain precarious, with the continued threat of Russian attacks on critical infrastructure, including transport routes and mining facilities.
Metinvest’s cash flow is also under threat due to the proximity of Russian forces to the Pokrovsk coal mine, which supplies coking coal to Metinvest’s steel mills and its competitors. A significant portion of the company’s revenue comes from this mine, and any further disruptions could have a devastating effect on operations. Recently, the mine's air ventilation system was targeted by Russian forces, adding to the company’s logistical and operational headaches. In addition, civilian areas, including worker transport buses, have been mistakenly attacked, further compounding the safety risks faced by Metinvest’s workforce.
Despite these challenges, Metinvest continues to contribute to Ukraine’s economy, remaining a significant taxpayer and providing financial support to the Ukrainian government and armed forces. The company employs 43,000 workers in Ukraine and another 9,000 in the military. This significant workforce underscores the role of the steel industry not only in industrial output but also in national defense and resilience. As Ukraine’s largest private sector supporter of the government and defense forces, Metinvest has played a vital role in bolstering the country’s war effort.
While the global steel market remains unpredictable, Metinvest is cautiously optimistic about a recovery as demand and prices are expected to gradually improve. However, the company remains cautious about the long-term outlook, as the war continues to disrupt production and export channels. Ryzhenkov’s comments reflect a broader concern among Ukrainian business leaders, who recognize that security guarantees and post-war economic policies will be essential to rebuilding and modernizing Ukraine’s industrial base, including its vital steel sector.
The road to recovery for Ukraine’s steel industry is fraught with challenges, but the resilience of companies like Metinvest, along with the potential for international support and strategic peace agreements, offers a glimmer of hope. As the industry navigates these turbulent times, the calls for security and clear policy directions will likely shape the future of Ukraine’s steel industry and its broader economic recovery.
