Ukraine's Steel Surge in Jeopardy as Conflict Intensifies

Ukraine's steel production increased by 21.6% in 2024, reaching 7.58 million metric tons. However, the proximity of fighting to the country's sole coking coal mine threatens future output. Formerly a major exporter, Ukraine has seen drastic steel output declines since Russia's 2022 invasion.

Ukraine's steel industry is witnessing a significant recovery, with output rising by an impressive 21.6% in 2024 to 7.58 million metric tons, according to the latest figures from the producers' union. However, there are growing concerns as fighting encroaches upon Ukraine's only coking coal mine.

The industry has faced severe challenges since Russia's invasion in February 2022, which devastated key steel production facilities. Ukraine, once a robust producer and exporter, saw output plummet by 70.7% in 2022. The union warned that potential shutdown of the Pokrovsk mine could reduce output to as low as 2-3 million metric tons by 2025.

With Russian forces advancing to within 2 km of the mine, operations have been partly halted, with capacities reduced to 50%. Steelmaker Metinvest BV, the mine's owner, may need to import coking coal, thereby increasing production costs. Industry stakeholders are exploring alternative domestic coal sources to mitigate potential disruptions.

(With inputs from agencies.)