Four years of sanctions have not closed the door through which Russian metal still reaches Europe. The EU imported 1.6 million tons of Russian iron and steel products in the first eight months of 2026, paying 682 million euros, down 54% in value year on year, GMK Center, a Ukraine-based consulting company, reports, citing Eurostat data.

Every euro spent on Russian metal is revenue for a state waging war on Ukraine, and the EU has banned most of it: pig iron, direct-reduced iron, iron ore and ferroalloys. Yet one category still flows almost untouched: semi-finished steel, mostly slabs, which made up 97.8% of the imports, or 1.56 million tons worth 670 million euros.

Volumes dropped 55% year on year after the full ban on Russian pig iron and DRI took effect on 1 January 2026, and no pig iron, ferroalloys, iron ore, or DRI reached the EU from Russia in the period, the center found. Iron ore and ferroalloys fall under sectoral limits, and the largest Russian producers are subject to corporate sanctions.

The slab loophole that keeps the money flowing

Slabs are the gap in the wall. Belgium took 767,700 tons of Russian semi-finished steel, nearly half the EU total, and Italy 191,800 tons, the center said.

Demand still outstrips the rules, with a slab quota for the year to September 2026 standing at nearly 3 million tons and effectively used up within four months, the data showed. Scrap was the only other notable inflow, at 41,300 tons worth 11.7 million euros, down about a third.

A ban that keeps getting postponed

The door is closing slowly, and not without a fight. The quota falls to 2.6 million tons for the year to September 2027, and to 2 million for the following year, the center added, yet attempts to halt Russian slab imports early have failed because the biggest consumer countries lobby against it.

Earlier, the Kiel Institute for the World Economy reported that the EU paid Russia €317 billion in goods since February 2022. The sum is €116 billion more than the €201 billion the bloc extended to Ukraine in financial aid over the same period.

Ukraine produced no steel at all last month, Oleksandr Kalenkov, president of the steelmakers’ association Ukrmetalurhprom, says, according to Ukrainian Radio. Russian missiles have destroyed the blast furnaces at its plants, stopping an industry that ran for more than 150 years.

At its peak, Ukraine smelted more than 42 million tons of steel a year, more than a third of what the entire EU produced last year. Before the full-scale invasion, steel and mining earned over a third of Ukraine’s exports and up to 12% of GDP. With the furnaces down, the country now risks losing billions of euros in export earnings, tax revenue, and thousands of jobs, Kalenkov warns.

“What is happening now is not just a hard or critical situation. It is a tragic situation when an industry more than 150 years old produced zero steel last month,” Kalenkov says.

The collapse is the end of a long descent. Output fell from more than 40 million tons to 22 to 23 million after 2014, and to 7.5 million last year, Kalenkov says. Fifteen years ago, the sector earned half the country’s foreign currency.

Steel remains Ukraine’s second-largest foreign-currency earner, employing more than 70,000 people directly and paying close to $1 billion a year in taxes.

A pillar knocked out piece by piece since 2014

The war has chipped at the industry for more than a decade. Ukraine lost about a third of its capacity after 2014, along with almost all its coking-coal mines. It later lost the last one, the Pokrovske mine, too. In 2022 it lost the Mariupol production site, more than 40% of what Ukraine then made, he recalls.

Even the plants left on government-controlled land have worked in survival mode since.

In 2021, the last year before the invasion, the mining and metals complex still accounted for more than a third of all exports and accounted for up to 12% of GDP, rising above 40% of regional output in Zaporizhzhia, Donetsk and Dnipropetrovsk oblasts.

The strikes that finished the furnaces

The decisive blow came from the air. Since August, a huge number of missiles, both ballistic and cruise, have targeted the plants, and practically all the blast furnaces still working were destroyed, he adds.

Ukraine’s largest steelworks, ArcelorMittal Kryvyi Rih, began a cold shutdown after four Russian attacks that killed six workers and halted primary steel production.

Kalenkov’s figure differs from one his association gave earlier: Ukrmetalurhprom reported that Ukraine’s steel output fell 4.7-fold year on year in September, to 131,000 tons, NV reported. It is not clear whether Kalenkov meant September or a narrower measure.

Ukraine's steel industry, one of the pillars of its wartime economy, may produce almost no steel at all next month. Output fell 57.3% in August under Russian strikes and could approach zero in October, and the recovery of giants like Zaporizhstal and ArcelorMittal Kryvyi Rih depends less on Kyiv than on Brussels, says Stanislav Zinchenko, director of the GMK Center, the center for industrial, mining, and metals sector expertise, in an analysis for ThePage.

Steel is Ukraine's second-largest foreign-currency earner and a prop for the hryvnia, employing more than 70,000 people directly and another 250,000 in related industries, and paying close to $1 billion a year in taxes.

Russian missile strikes on the big plants, compounded by an energy crisis, closed ports, and EU competition, have cut production to a fraction and threaten to halt it, Zinchenko says.

He calls it the worst crisis the industry has faced since independence, "a perfect storm" that has struck all at once. The sector supplies 6% of Ukraine's GDP and 13% of its foreign-currency earnings.

Output could hit zero

The fall has been precipitous. In August, steel output dropped 57.3 percent year on year to 277,000 tonnes and pig iron 65.6%, Zinchenko says. Across eight months, the decline is 12.5%, and he warns that October could bring output to zero. Exports have cratered too: iron ore down 27% over eight months, long rolled steel down 45.8%, semi-finished products down 76% in a single month, and pig-iron exports halted entirely.

September may yield just 100,000 to 150,000 tonnes of steel, he says. Four producers bore the brunt: Zaporizhstal, Kametstal, ArcelorMittal Kryvyi Rih, and Interpipe.

Rebuilding breaks new ground

"No one in the world has learned how to rebuild metallurgical giants after missile strikes," Zinchenko says.

In reality, it means technical audits, clearing rubble, and ordering unique new equipment, at a cost the plants cannot meet after four and a half years of war spent at a loss or at zero margin, their reserves gone.

Three steps for Kyiv

Zinchenko sets out three moves the state could make at once to stabilize the industry:

• Frontline rail. Give steelmakers priority access to locomotives from the state railway Ukrzaliznytsia within 150 kilometers of the front, so the product can still be moved out.
• Energy parity. Scrap or soften the rule forcing industry to import 80% of its electricity, which leaves plants paying European prices they cannot match.
• Market protection. Tax scrap-metal exports to keep raw material for decarbonization at home, and curb Turkish imports that undercut Ukrainian steel.

However, the recovery depends not on Kyiv, but on Brussels

Recovery is impossible without international funds and guarantees. No one will provide loans to enterprises on foreign capital markets during the war. No one will invest in recovery "into a void," the expert says.

He names four steps that would support the industry:

• A recovery fund. A dedicated fund for the steel industry, modeled on those partners built for Ukraine's energy sector, to pool grants and cheap loans.
• A safe sea corridor. Reopen the deepwater ports, as Ukraine managed in 2023 and 2024; without them, rail costs make exports unprofitable.
• No EU quotas. Remove the European Union's restrictive quotas and tariffs on Ukrainian metal.
• A CBAM exemption. Free Ukrainian steel, for the duration of the war and reconstruction, from the EU's carbon border levy, which Zinchenko says would otherwise finish off its competitiveness.

Meet those, he says, and bringing the plants back to baseline could take three to six months, with a full rebuild one to two years.