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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North Korean ballistic missile kills 7 steelworkers on their way to shelter, shuts down Zaporizhstal plant

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.”

A Russian ballistic strike on Zaporizhzhia, Ukraine, killed seven employees of the Zaporizhstal steel plant and injured 21 others, Ukrainian steelmaker Metinvest, the plant’s majority owner, said on 11 August.

The workers were on their way to a shelter after an air raid alert was announced when the strike hit the industrial site, according to the company. 

Metinvest said the attack also damaged energy facilities and infrastructure, as well as the main and auxiliary facilities of the plant’s coke and blast-furnace operations.

Russia’s ballistic missile strikes leave very little time between threat detection and impact for people to react and reach shelter. Several people have been killed from strikes across the country while on their way to bomb shelters. 

Zaporizhstal shuts down after strike

Metinvest said Zaporizhstal has been completely shut down following the attack, while its other production sites in the city are operating at reduced capacity.

Company specialists are assessing the damage and determining the scope and timeline of repairs. Emergency and restoration work is already underway, according to the statement.

The company said its Zaporizhzhia facilities are civilian industrial sites that employ tens of thousands of people and produce steelmaking and coke-chemical products.

Metinvest said it is providing medical assistance and support to the 21 injured employees and staying in contact with the families of those killed and wounded.

The company's facilities will fly flags at half-mast on 11 and 12 August in mourning for the seven Zaporizhstal workers killed in the attack.

North Korean missiles used against Zaporizhzhia

Ukrainian President Volodymyr Zelenskyy said Zaporizhzhia was targeted overnight with North Korean ballistic missiles, Russian Zircon missiles and guided aerial bombs.

Zelenskyy said the attack was designed to cause maximum damage to civilian infrastructure.

Ukraine's military intelligence said on 5 August that a North Korean missile unit had begun deploying to western Russia, potentially adding up to 120 ballistic missiles and six launchers to Russia's arsenal.

According to Ukrainian intelligence representative Andrii Cherniak, North Korea has supplied Russia with around 150 KN-23 and KN-24 missiles since late 2023, including a recent batch of 40 missiles.

The missiles have been linked to attacks with high civilian casualties, including a July strike on Radushne in Dnipropetrovsk Oblast that killed an entire family.

Ballistic threat is growing

The strike comes as Russia has increasingly relied on ballistic missiles in attacks on Ukrainian cities. Unlike drones and cruise missiles, ballistic missiles travel at very high speeds and are much harder for Ukraine to intercept, particularly because Kyiv has a limited supply of the advanced air defense interceptors needed to counter them, mainly US-made Patriot systems.

Ukraine has reported that most ballistic missiles launched in recent mass attacks have penetrated its air defenses, contributing to severe destruction and civilian casualties.