Ukrainian metallurgy under triple blow: blockade, tariffs, and EU quotas

Oleksandr Kalenkov, president of Ukrmetallurgprom, has warned that the combination of a naval blockade, rising railway freight tariffs, and new European Union quotas could deal a devastating blow to Ukraine’s mining and metallurgical sector and its economy as a whole.

He set out his views in a piece for the GMK Center portal.

According to Kalenkov’s forecast, Ukrainian ore-processing plants will continue to shut down due to the blockade of Black Sea ports. Alternative overland and Danube routes, in his assessment, are unable to compensate for the lost capacity: redirecting the necessary volumes of output to such routes is neither economically viable nor physically possible.

As a result, only those enterprises oriented toward the domestic market will be able to continue operating. The Poltava Mining and Processing Plant is already running at minimum capacity, the Southern Mining and Processing Plant was shut down several weeks ago, and the Ingulets Mining and Processing Plant has been idle for an extended period.

Due to the naval blockade, losses in metal product exports could exceed 50% of current volumes. The restriction of exports, in turn, is leading to a reduction in both production volumes and domestic demand for ore.

Kalenkov had previously also stated that the current naval blockade of Ukraine is dealing a heavier blow to Ukrainian metallurgy than at the start of the war, and that the severity of the consequences is linked to the position of the European Union.