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Reuters: Export blockade threatens Ukraine's steel industry

by Nate Ostiller October 26, 2023 5:01 PM 2 min read
An employee works at a blast furnace shop at the steel maker plant company of Zaporizhstal in Zaporizhzhia, Ukraine on Sept. 21, 2023. (Andrii Kalchenko/AFP via Getty Images)
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Ukraine's massive steel industry has faced significant losses as a result of Russia's war and the related blockade of the Black Sea, Reuters reported on Oct. 26.

The industry, which made up 10% of Ukraine's GDP and 30% of exports before the full-scale invasion, has shrunk by more than 80% since 2021.

The sector has been primarily hampered by the almost complete inability to ship cargo through the Black Sea. Although steel has been sent overland via rail, the associated tariffs raise the cost four-fold.

In addition, some of the biggest plants, such as the now famous Azovstal factory in Mariupol that saw months of brutal fighting in early 2022, are now in occupied territory or near the front lines.

The Azovstal plant was almost completely destroyed during Russia's siege of the city.

Roman Slobodianiuk, the director of the Zaporizhstal steel plant in Zaporizhzhia, also said it has simply been difficult to keep the factory fully staffed. Many workers and their families fled during the first few weeks of the war due to its close location to the front lines, and more than a thousand others joined the army. Overall, Slobodianiuk said that his staff decreased by 20%.

Ukraine's steel plants have been afflicted with the same wartime woes as other industries- Russia's strikes on Ukraine's electrical grid degraded the ability of the plants to function at full capacity.

There is one bright spot, however. The massive increase in Ukraine's defense industry, as well as the construction of bomb shelters and rebuilding of cities, has also caused a rise in domestic consumption.

It will not be enough to compensate for the massive decrease in other areas.

"If we do not have open sea ports, our industry will not survive, and all other (industries) will follow us," said Oleksandr Kalenkov, head of Ukraine's steelmakers' union.

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