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Ukraine’s Zaporizhstal may idle half its capacity to fit new EU steel quotas
Ukraine’s Zaporizhstal plant plans to shift much of its output to lower-value pig iron to keep exporting under the European Union’s new steel quotas. The move would idle up to half the plant’s capacity, its parent company, Metinvest, says.
Ukraine’s new allowance runs to roughly 1 million metric tons, about 60% below its 2025 shipments to the bloc.
The EU says the quotas shield its own producers from a global steel surplus. For Ukraine, whose steel entered duty-free after Brussels lifted tariffs after the 2022 invasion, they land on an industry already hit repeatedly by Russian strikes and cut off from the sea. The tariff-free quota fell by half on 1 July, with a 50% duty on anything above it.
Ukraine’s new allowance runs to roughly 1 million metric tons, about 60% below its 2025 shipments to the bloc, the Kyiv consultancy GMK Center calculates.
Steel makes up about 15% of Ukraine’s exports, and the EU buys close to four-fifths of it. The country’s Federation of Employers estimates the curbs could cost $1.2 billion in foreign earnings and cut GDP by 0.6%.
Falling back on pig iron
Pig iron, a semi-finished product, falls outside the quota, so lifting its share keeps the furnaces earning. But the switch would force the plant to reassign the workers behind those idled lines, Oleksandr Myronenko told Reuters. “Instead of support from the European Union, we face restrictions,” said the Metinvest chief operating officer.
Ukrainian mills cannot easily sell elsewhere: they are less efficient than cheaper Turkish and Chinese suppliers and are undercut in Europe’s own market, Myronenko said.
With the Black Sea route closed, importing coking coal through other European ports now runs $30 to $40 more a metric ton. Rail freight rose 30% this month, and an EU carbon charge has been applied to steel imports since 1 January.
A strike, and a plan in doubt
A Russian ballistic missile killed seven Zaporizhstal workers and shut the plant on 11 August.
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The fate of Metinvest’s $8 billion, 15-year plan to convert to cleaner “green steel” is unclear; Myronenko called the modernization unrealistic in wartime. Zaporizhstal is the largest employer in the Zaporizhzhia region and, with the rest of Metinvest, is majority-owned by Rinat Akhmetov, Ukraine’s richest man.
On the plant floor, senior foreman Artem Kalinevych said: “As of today it’s not clear what comes next.”
