Russian strikes choke Ukraine’s economy as steel shuts down and grain exports stall

Across Ukraine, the economic toll of Russia's intensified air campaign becomes increasingly apparent. The furnaces at Kamet Steel in Kamianske are cold, the factory floor deserted, after Russian ballistic missiles struck the complex on Sept. 5. This vast industrial facility, which accounted for more than a quarter of Ukraine's steel output in 2025, employed thousands producing steel and pig iron for domestic construction and European markets.

Similarly, grain piles up in fields and silos as farmers struggle to find safe routes from airstrikes while waiting for prices to rise. Russia's near-daily strikes with ballistic missiles and drones are targeting industrial and energy plants, along with the logistics networks, railways and export routes that keep Ukraine's economy afloat.

Economic Contraction

The attacks have forced Ukraine's government to confront a deepening cash crunch as revenue from steel, agriculture and other key sources evaporates. Ukraine's central bank last week forecast a 0.4% economic contraction in 2026, reversing its previous projection of 1.8% growth. The bank also raised its inflation forecast to 12.5%, from 10% in July.

Export Collapse

Agriculture accounts for up to 60% of Ukraine's foreign currency earnings, making it critical to the wartime economy. However, Russian attacks on Black Sea shipping have sharply reduced traffic through Ukraine's deep-water ports. According to maritime data from Lloyd's List Intelligence, there were only 21 ship arrivals at Black Sea ports in August, down about 90% from a year earlier.

Soaring insurance premiums and the constant threat of Russian strikes deter shipowners, with dozens of sailors killed in attacks this year. While traffic has shifted to lower-capacity ports on the Danube River, this route is costly and inefficient, with dozens of ships often waiting days to enter or leave the river's shallow Sulina Channel.