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.

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.”

Russia dismissed the idea of a Black Sea ceasefire on 14 August, Reuters reported, a day after the agency disclosed that Ukraine had proposed a mutual halt to attacks on civilian targets there.

Russian Foreign Ministry spokesperson Maria Zakharova said Moscow saw no grounds for measures that would give Kyiv a temporary reprieve.

Russia’s dismissal comes after its strikes drove shipowners from Odesa as Ukraine’s wheat harvest peaked. More than 90% of Ukraine’s farm exports leave through three deepwater Odesa ports. Reuters reported that Ukraine’s 12 August operation at Novorossiysk targeted a naval base and warships, although nearby grain terminals also suspended operations.

Russian forces, by contrast, have repeatedly struck foreign-flagged ships and Ukrainian port infrastructure. The disruption is stranding Ukrainian crops and raising concerns over global food supplies.

Zakharova accused Ukraine of deliberately destabilizing civilian shipping but did not mention Russia’s attacks, Reuters said. She was responding to Turkish Foreign Minister Hakan Fidan, who said Ankara had proposed a Black Sea moratorium to both sides.

Zakharova also said Moscow had received no formal proposal from Türkiye and ruled out reviving the 2022–23 Black Sea grain deal, calling it one-sided.

Ukraine’s harvest has nowhere to go

Reuters said Ukraine’s grain exports had fallen 76% year on year so far in August. Ukraine’s Agriculture Ministry projects agricultural exports could nearly halve, from 64.4 million to 29.6 million tonnes. It expects silos to fill by October as grain backs up.

World Grain, citing the US Department of Agriculture’s Foreign Agricultural Service, reported that corn exports could fall 39% and wheat exports 26%. The US agency expects unsold corn stocks to rise more than tenfold.

The ministry has asked the EU for €220 million to subsidize farm loans and help producers finance autumn sowing. Reuters separately reported, citing unnamed sources in both countries, that Kyiv and Chisinau were discussing a rail route to Romania’s Constanța port. Kyiv estimates it could carry only 10% of Ukrainian grain exports.

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Russia turns ports into targets

After Russia refused to extend the UN- and Türkiye-brokered grain deal in 2023, Ukraine opened its own maritime corridor. It remained operational until this summer’s escalation.

Russian forces repeatedly struck foreign-flagged vessels in July. On 19 July, Russian missiles hit the Guinea-Bissau-flagged, Turkish-owned Golden Leo as it left Odesa carrying corn. The attack killed 10 people, Ukraine’s Navy and Sea Ports Authority said. Ag Bull Trading reported that the attacks brought the corridor to its first full stop since it opened in August 2023.

Russia’s dismissal leaves Ukraine’s corridor officially open while Russian attacks continue to drive shipowners away.