Ukraine's steel industry has been brought almost to a standstill by a sustained Russian missile campaign, with the country's largest steelworks in the southern city of Zaporizhzhia shut down indefinitely after four waves of attacks in August and September. Every Ukrainian metallurgical plant has now been hit, some of them several times, according to Metinvest, the steel producer that owns the Zaporizhstal plant.
Russia fired 17 missiles at Zaporizhstal alone, said Oleksandr Myronenko, Metinvest's chief operating officer. Eight workers were killed and 31 wounded. The plant, which employs 8,500 people, has lost most of its equipment, and its blast furnaces are almost completely ruined. An attempt to restart one furnace ended when another air strike came after just ten hours. Myronenko said the sector's contribution to Ukraine's GDP is now "probably close to zero". Before the full-scale invasion in 2022, metallurgy and mining made up roughly 10% of GDP and a third of exports, and supported more than half a million jobs. Russia has justified the strikes by alleging that the plants produce military hardware.
The damage reaches well beyond the factory gates. Stanislav Zinchenko of the Kyiv-based consultancy GMK Center says taxes from metal companies have funded 30-70% of local government spending in their host cities, paying for heating, nurseries and social services. He warns that mass job losses could trigger migration waves extending beyond Ukraine. Steel is also needed for military equipment, shelters and repairs to war-damaged buildings. Even if output resumed, attacks on railways and ports would complicate deliveries, and EU quotas on steel imports introduced on 1 July could add further pressure.
The steel strikes are part of a broader pattern. Ukraine's Ministry of Economy expects economic damage from Russian attacks to reach 10 billion euros by the end of the year. The UN counted 32 attacks on commercial businesses in August, almost three times the number in July. Data centres, internet providers, a grain store in Odesa, a pharmaceutical firm, petrol stations and distribution centres have also been hit. Prime Minister Serhiy Koretsky says more than a million square metres of logistics facilities have been destroyed, and the retail chain Epicentr has lost 18 buildings. A Kremlin spokesperson said Ukraine "is paying the price" for its own attacks on Russia, which have included strikes on oil refineries.
The pressure comes as Kyiv faces a 23-billion-euro gap in its defence budget. President Volodymyr Zelensky has urged the EU to speed up the second part of a 90-billion-euro loan, warning that otherwise Ukraine cannot buy new drones and missiles this autumn. Brussels is reportedly holding back until Ukraine advances reforms, though EU members approved 6.6 billion euros in military aid. Koretsky has announced that only essential spending, such as defence, pensions and social benefits, will be approved for now.
Economist Oleksandra Moskalenko of the Kyiv National Economic University argues that the defence industry cannot rely solely on uncertain external funding such as EU money. That is why keeping the domestic economy running matters, and why, she expects, the debate over using frozen Russian assets for reconstruction will return to the European agenda.