According to GMK Center, the shutdown of metallurgical plants in Ukraine has sharply reduced domestic demand for coal and coke, and this is already affecting related industries and logistics.
Reduction of iron ore production by 37%
Experts at GMK Center estimate that iron ore production in 2026 will fall by 37% due to the loss of domestic consumption. Mining and ore enterprises will operate taking export volumes to Europe into account, which increases the risk of further shutdowns of remaining capacities.
Logistical constraints, particularly maritime, do not allow all iron ore to be fully redirected to export, so some product risks remaining unused or being delayed in supply chains.
Losses at Ukrzaliznytsia and the impact on small businesses and construction
Ukrzaliznytsia has already lost “over 30% of its most profitable freight base for transportation - ore and metal”. To offset losses, the company is trying to raise freight tariffs, which, according to management, makes the situation even more difficult.
“Previously losses from the passenger sector were covered by profits from domestic freight transport and transit. Transit is halted, and freight flows risk falling further because of the plants’ downtime,” says Oleksandr Peretsovskyi, chairman of the board of AT «Ukrzaliznytsia».
When domestic production of rolled products, steel and pig iron stops, construction and small businesses switch to imported materials, which are more expensive. Suppliers from China and Turkey are appearing on the market and quickly filling demand.
As Oleksandr Kalenkov believes, one job in the mining and metallurgical complex (GMK) creates 7−8 jobs in related industries, so the crisis in metallurgy is reflected in transport, repair companies and local trade in industrial regions.
Experts’ proposals to stabilise the operation of the mining and metallurgical complex
Experts say that to restore and stabilise the operation of the mining and metallurgical complex the state must take a package of urgent anti-crisis measures in logistics, energy, tax policy and personnel safeguarding. Proposals include lowering the production cost of metal products and ensuring uninterrupted logistics to foreign markets.
The list of proposed measures includes freezing the growth of freight tariffs at Ukrzaliznytsia and giving priority allocation of wagons and locomotives to strategic exports, reducing fees at open sea ports, protecting the power supply of large facilities from rolling blackouts and reducing the customs burden on metallurgical plants.
