Lukashuk: If metallurgy production stops, Ukraine could lose approximately 7% of its GDP — $15 billion per year
The head of the Dnipropetrovsk regional council, Mykola Lukasyuk, stated that due to the war and logistical problems, Ukrainian metallurgy is facing the threat of shutdown. According to the worst-case scenario, this would cost the country approximately 7% of GDP — about 15 billion dollars per year. He added that about 90% of steel production is currently not operating, and there was a week in September when the country produced no steel at all for the first time in a century.
The head of the Dnipropetrovsk regional council, Mykola Lukashuk, stated that Ukrainian metallurgy is under threat due to the war, logistical problems, and a decline in production. According to the worst-case scenario, the shutdown of the industry could cost Ukraine approximately 7% of its GDP — about 15 billion dollars per year; the calculations cited by Forbes Ukraine.
According to him, approximately 90% of steel production is currently inactive, and there was a week in September when the country produced no steel at all for the first time in a century. One job in the metallurgical industry supports 7–8 jobs in other sectors.
At "ArcelorMittal Kryvyi Rih" at the beginning of the year, 12 633 people were employed, of whom 2 850 are currently serving in the Armed Forces of Ukraine. In addition, subcontractors are hired, according to Lukashuk, numbering at least as many as the regular employees.
Restoring production, according to various estimates, could be faster than returning people: rebuilding a factory could cost around 500 million dollars, and its launch could cost another 50 million. Metallurgical workers are prepared over many years, and production teams are formed over decades.
According to Lukashuk, restoring the industry requires security, the preservation of workforces, and normal logistics – specifically, access to ports and acceptable transportation tariffs. Previously, the main part of the export of ore and metal went through seaports, but their operation has been complicated due to Russian strikes; only a portion of the former volumes are being transported by rail, the Danube, and by road, and this is more expensive.
Another factor is the EU's carbon tax, which adds from 50 to 75 euros to the cost of each ton of Ukrainian steel. The Ukrainian government requested to postpone its implementation for Ukraine, but Europe refused. Lukashenko believes that if metallurgy does not recover, Ukraine will lose an entire sector of the economy, and related industries – orders and jobs.