ArcelorMittal halts Kryvyi Rih steel plant as Russian missile strikes deepen Ukraine's budget deficit

Shutdown at Kryvyi Rih

ArcelorMittal has begun idling its blast furnaces, ore processing facilities, and production infrastructure at its plant in Kryvyi Rih. The decision follows four Russian missile strikes on the complex over a five-week span, with the most recent strike occurring on 21 September. The attacks killed five workers and injured 17 others, leaving one employee in critical condition. Plant management determined that continued production was no longer safe or economically sustainable under persistent bombardment. ArcelorMittal plans to take an asset writedown of approximately $1 billion on its Ukrainian operations while maintaining safety personnel on site.

Impact on Ukrainian steel production

The Kryvyi Rih complex employs approximately 16,000 people across its steel plant and iron ore mine. Before the 2022 Russian invasion, the facility produced about 4.9 million tonnes of steel annually and generated $4.1 billion in sales in 2021. Output had already declined by roughly two-thirds since 2022 despite hundreds of millions of dollars invested by ArcelorMittal to keep facilities operational. Together with Zaporizhstal and Kametstal, Kryvyi Rih accounted for around 90% of Ukraine's domestic steel output. Russian strikes have now brought all three facilities to a complete halt, halting exports from a sector that generated one-tenth of national GDP before the war.

Urban crisis and local services

In Kryvyi Rih, a city of 600,000 residents and the hometown of President Volodymyr Zelensky, municipal authorities are struggling to maintain essential services. City officials are prioritising the operation of hospitals, schools, kindergartens, and public transit following repeated strikes with ballistic missiles and jet drones. Mayor Oleksandr Vilkul described the municipal situation as worse than anywhere outside the direct front lines.

It's about survival. Right now we need to survive.

Widening national budget deficit

The industrial disruptions have reduced government revenue at a time of rising military expenditure. Daily defense costs have reached $190 million, up from $140 million per day two years ago, according to parliamentary budget committee chair Roksolana Pidlasa. In the first nine months of 2026, Ukraine spent over $44 billion on defense while collecting approximately $42 billion in tax revenue.

Tax revenue losses caused by Russian attacks exceeded 49.5 billion hryvnias (over 4.3 billion Polish zlotys) across the nine-month period, with full-year revenue losses projected to reach 70 billion hryvnias. The government is also managing delays in foreign assistance tied to required policy reforms.

Macroeconomic strains and spending cuts

Broader economic indicators reflect the damage inflicted on transport networks, ports, and industrial sites. Economists project Ukrainian gross domestic product growth at 0.5–1.5% this year, down from 1.8% in 2025. Attacks on Black Sea ports caused grain exports to drop 36.6% year-on-year in September, affecting the country's primary source of export earnings. Ukraine faces a total financing gap of $56 billion this year, including $27 billion in military spending. To ensure funding for the armed forces, public sector wages, and pensions, the government has frozen non-essential expenditures, including portions of reconstruction funding.