INTERVIEW: EU quota cuts threaten Ukraine steel survival, Metinvest CEO warns

The European Union's decision to tighten steel import quotas on Ukraine is threatening the survival of the country's steel industry at a moment when Russian missile strikes have already crippled key production facilities, Metinvest chief executive Yuriy Ryzhenkov warned, saying the new trade barriers had dealt a blow that rivalled the damage inflicted by the war itself.

Ryzhenkov said in an interview with S&P Global Energy on Oct.16 that the combined effect of tighter EU market access is pushing Ukrainian steelmakers toward an existential crisis, with significant implications for European commodity trade flows.

Steel accounts for roughly 7% of Ukraine's gross domestic product, and the EU is the industry's largest export market. The European Commission's decision to reverse its first draft but not official position exempting Ukraine from tighter steel import restrictions therefore came as a severe shock to producers already contending with damaged plants, disrupted logistics and deep uncertainty over the course of the war.

Under measures that took effect July 1, the EU nearly halved annual tariff-free import quotas for Ukrainian steel to approximately 1 million mt, while imposing a 50% duty on shipments exceeding those limits. Ukraine exported 2.53 million mt to the EU last year and 2.03 million mt in 2024, according to data from S&P Global Market Intelligence's Global Trade Analytics Suite.

"As known in the first draft, Ukrainian steel was exempted of quotas, but then when they entered officially, they changed and don't know why they changed their position, but we hope and we are working to persuade them to reverse the decision," Ryzhenkov said.

Market pressure

The quota tightening compounds severe operational disruption caused by Russian attacks. Missile strikes have heavily damaged Metinvest's Zaporizhstal and Kamet Steel facilities, forcing temporary shutdowns. Two of the Group's four iron ore operations (including JVs) are also idle, Ryzhenkov said. Other producers, including ArcelorMittal Kryvyi Rih and Interpipe, have also been forced to halt output.

Ukrainian think-tank GMK Center has warned that continued attacks could limit national steel production to around 4.3 million mt in 2026 — equivalent to output recorded in just the first eight months of the year — and that in a worst-case scenario, Ukraine could cease steel production entirely in 2027, leaving domestic demand reliant on imports worth up to $1.5 billion.

Russian attacks on Ukraine's Black Sea shipping corridor have further compounded the crisis by disrupting steel export routes and effectively cutting off access to global markets beyond Europe. With alternative trade flows blocked, Ryzhenkov said the EU remained Ukraine's only viable major export destination. "If Europe closes its market to us, it is effectively killing our business," he said.

Despite the pressure, Metinvest is pursuing international expansion. The company has received approval for plans to build a steel mill in Italy, Europe's second-largest steel producer and its biggest per-capita consumer of the metal. Discussions with potential partners, including both industrial companies and financial investors, are under way.

Looking further ahead, Ryzhenkov said the greatest challenge facing the company is planning investment and operations without knowing when the war might end, adding that this winter is expected to be the most difficult since the conflict began.