Russia and Ukraine have been fighting over it for over 4 months. Is there a reason why the city seems to be considered important for the war? I heard analysts say that the city only has a symbolic importance and they've been attacking it because of the sunk-cost fallacy. Is this true, or is there any strategic value in obtaining the city?
It seems to be agreed by all that the city's location and the city itself has no real strategic military importance. But even if it has just symbolic importance, that does not mean that a decision to continue attacking or defending it is merely an example of the sunk cost fallacy.
The Russian Side
In this case, from the Russian side, the importance seems to be related to prestige, both of the Russian army in general and of certain individual units within it:
[T]he battle for Bakhmut is widely seen as an opportunity for Moscow to regain lost prestige after months of military setbacks....
The battle for Bakhmut is also a key test for the Wagner head, Yevgeny Prigozhin, who is believed to have recruited thousands of Russian convicts to help with the storming of the city. Prigozhin has previously fiercely criticised the Russian defence ministry for its performance in Ukraine and has lauded Wagner as the country’s most capable fighting force. The city’s capture by Russia would increase Prigozhin’s political standing as he seeks a more prominent position in the country’s decision-making process. [g1220]
Prigozhin has claimed that he's also befitting from a war of attrition here (for more on this see below), though that may be merely cover to try to provide a plausible military excuse for the above attempt to regain prestige:
Yevgeny Prigozhin, the founder of Russia’s Wagner group, has said his troops have primarily centred their efforts on demolishing the Ukrainian army there.
“Our task is not Bakhmut itself, but the destruction of the Ukrainian army and the reduction of its combat potential, which has an extremely positive effect on other areas, which is why this operation was dubbed the ‘Bakhmut meat grinder’.” [o1210]
The Ukrainian Side
For Ukraine also, there is a component of morale and public opinion involved:
If Bakhmut were to fall, military observers have said Ukraine could pull back to the west without suffering heavy strategic defeats. But a retreat from the city might suggest Kyiv’s military efforts were running out of steam after months of continuous gains....
“Militarily, Bakhmut has no strategic importance,” Col Gen Oleksandr Syrskyi, the commander of Ukraine’s ground forces, said earlier this month. “But it has psychological significance.” [g1220]
However, this battle can also be seen as a military opportunity for Ukraine. The battle is currently seen by both the Russians (as mentioned above) and the Ukranians as a war of attrition:
[T]he embattled city of Bakhmut, which has largely been ravaged after nearly five months of fighting [has] been referred to by both sides as the “Bakhmut meat-grinder”. [g1220]
Normally in a war of attrition the side incurring higher costs would be wise to back away and chose another avenue of attack.¹ But Russia's apparent need to take Bakhmut for non-military reasons means that, if Ukraine incurs relatively lower costs defending it, the battle is an opportunity to wear down the Russian army at lower cost than Ukraine would have to spend otherwise. It does appear that Ukraine's costs are indeed lower than the Russians':
“They are still using old Soviet tactics,” explains Mikola, the fire coordinator [for a unit of the Ukrainian 24th mechanised brigade], who supplies the target grids to the gun crews from the drone operators and forward fire controllers with the infantry. “We have more modern technology than the Russians so we can be more accurate and sparing with our ammunition.”
“We only shoot when we have coordinates,” explains Vasily Pavlokavic, aged 42, a short and stocky officer who commands the crew of the howitzer....
“They just send one group after another against our positions,” Sasha, a member of Ukraine’s 24th mechanised brigade fighting in the area, told the Observer.
“If the attack doesn’t succeed they’ll just try again in exactly the same way. The only strategy I can see at this point is that they want to take the city so they can claim some kind of victory after a year that has seen so many losses.
“We’ve noticed in the past two weeks an increase in shelling and infantry attacks as if they are in a rush to take Bakhmut. That also means that they are suffering ever greater losses. They are just throwing in meat.” [o1210]
And it also appears that the Russians may indeed be suffering severe attritional costs:
[Andrii, a crew member of the Ukrainian 24th mechanised brigade,] recalls when his brigade was last in this area, during the summer, when any Ukrainian fire was met multiple times over from Russian guns. “They would fire at everything. Now they have become more sparing,” he adds, suggesting shortages of Russian ammunition....
A recent assessment for the Institute for the Study of War [stated], “The costs associated with six months of brutal, grinding, and attrition-based combat around Bakhmut far outweigh any operational advantage that the Russians can obtain from taking Bakhmut.” [o1210]
Reports of Russian attrition on a more general level are widespread; see, for example, "‘The army has nothing’: new Russian conscripts bemoan lack of supplies" (The Guardian, 2022-10-20).
On the Russian side, the importance of taking Bakhmut appears to be related to prestige, particularly of the Wagner unit and to some degree of the Russian side overall.
On the Ukrainian side, public perception is also a factor, but it may also be an opportunity for the Ukrainians to wear down the Russian army at lower cost than they could do elsewhere.
[g1128] "Fighting in east Ukraine descends into trench warfare as Russia seeks breakthrough" (The Guardian, 2022-11-28)
[g1209] "‘Only 100 metres apart’: Ukrainians and Russians face off in Donetsk" (The Guardian, 2022-12-09)
[o1210] "In the ‘Bakhmut meat grinder’, deadlocked enemy forces slog it out" (The Observer, 2022-12-10)
[g1220] "Putin admits to ‘complicated’ situation in Russian-occupied Ukraine" (The Guardian, 2022-12-20)
¹ The side incurring higher costs in a war of attrition might choose to continue the attack if they have have vastly larger resources available that cannot be more profitably used elsewhere. However, Russia in this case does not; they've already had to conscript hundreds of thousands more troops, many of whom are being sent to the front with minimal training.
To play devil's advocate since 2/3 answers so far basically say "makes no sense, just for politics", let's take a look at a more military set of possible motivations for Bakhmut. Do I truly believe the Russian high command has only rational reasons and is pursuing an optimal strategy in Bakhmut? Not really. But assuming your enemy is only stupid is rarely sound planning.
It MAY be the least bad spot to make some effort in, given the force structure Russia currently has available.
Do remember Russia 140M pop vs 40M Ukraine when gauging how beneficial a higher kill ratio is to Ukraine.
As a comment says: killing your enemy is not the point in warfare. Very true, doesn't mean armies haven't repeatedly tried to use just this approach. And Russian commanders may be even more predisposed to do so.
It's close to a concentration of Russian troops and it may threaten more important Ukrainian cities:
taking Bakhmut would enable Putin's forces to launch artillery strikes on key places, such as the cities of Kramatorsk and Slovyansk in the Donetsk region.
"They will be in range of the Russian artillery, and those places are important," said Roozenbeek.
"All other cities and towns in Donetsk region are too far from the Russian lines and the capture of Bakhmut will signify at least some progress for Russians in Donetsk region," he said.
It's what worked before.
When they captured Sievierodonetsk it was through a grinding positional battle. Granted, it hasn't translated into all that much. But Ukraine suffered significant losses at the time and it is the one operational level victory Russia has had. I remember reading, not sure where, that there was some criticism of Zelensky for hanging on too long to that city - heavy losses. True, the artillery situation has changed, but still...
An area can become strategic once it sees enough fighting.
Like people who are famous for being famous, once many troops fight for a hithertho not very significant area, it can assume real significance because that's where military effort is expended.
One example would be the Kursk/Zitadelle battle in 1943. Was it necessary/useful at the start? No, not once German prospects for an easy encirclement faded out, but once both sides committed enough troops to it, it assumed an artificial, but no less real, strategic significance.
Maybe Bakhmut is also the least-bad use of the forces Russia has at its disposal now:
Per ISW, Kofman on War on the Rocks, Russia has suffered massive losses in its regular units and especially its officer corps. They're using a hodgepodge of understrength units. Kofman says that enough conscripts can hold a defensive line, but will struggle to perform offensive missions and especially combined arms. Russia has never been great at combined arms integration and all these losses and problems surely can't be helping. Russia is presumably training those conscripts it did not send to plug in the front line right now and hopes to do something useful with them later, once trained. So don't expect sweeping equivalents of Ukraine's Kharkiv dash from Russia right now. They probably can't.
But one area undertrained, under-integrated, under-armed, under-led infantry can be semi-useful is the kind of mindless repeat assaults Russia seems to be indulging in Bakhmut.
i.e. it may not make sense to "do a Bakhmut" given the immediate availability of better trained, better equipped troops to perform savvier offensive missions.
Pending reconstitution of those forces through training and rearmament during the winter however, Bakhmut may be a valid enough operation to allow Russia to retain some level of initiative with essentially disposable troops.
If not Bakhmut, where else, right now?
I for one found the surprise full withdrawal from Kherson very well executed. Assuming the same staff is involved in pursuing Bakhmut there may actually be some sound strategic reason to persist there, besides the politicking. Not that I give Russia much credit on its strategy to date, but cautious is better than over-confident.
p.s. All that said Bakhmut still doesn't look all that clever. Grinding static positional battles are not a sign of strategic cleverness, the overall value of Bakhmut seems low and Russia seems to lack reserve forces to exploit any hypothetical breakthrough it would achieve there. And then it would just find the next line of Ukrainian defenses. Still, the media consensus that it is pointless seems a bit facile to me.
p.p.s. Don't take all of this as me claiming there is no political posturing going on, as alluded to in the other answers.
At the moment, unclear and covered by the fog of war
There are sources saying Bakhmut has strategic value, e.g. (all sources are from a random Google search as I was writing this answer, but I have read a lot of such articles with similar statements over the past few months):
For the uninitiated, Bakhmut is located on a strategic supply line between Donetsk and Luhansk, the two separatist-held regions in Ukraine’s Donbass region, which Russia claimed to have annexed a few months ago.
Experts agree that the capture of Bakhmut could potentially change the course of the conflict and give Russia a platform to launch a broader campaign across many parts of Ukraine.
On the other hand you get statements like this:
The offensive has been Russia's priority since early August but the capture of the town "would have limited operational value," although it could be a staging post to threatening the larger urban areas of Kramatorsk and Sloviansk, officials added.
The ISW [Institute for the Study of War] had previously assessed that Russia was undertaking a "high-cost effort" to take the city which was only "of limited operational significance."
So yeah: there are some conflicted opinions on how valuable Bakhmut is strategically. Everyone agrees it's worth at least something, but people disagree over how much. For the people who think it's not worth much, they have lots of theories as to why Russia is trying so hard to conquer it, but they're all educated guesses; at the moment, nobody except the Russian high command actually know what is the value they see in Bakhmut. We might find out if/when Rusia actually takes the city, or when the historians from 10+ years in the future dig through the historical records.
Military/Economics analyst Perun's metaanalysis floated 3 possible reasons for Russia's intense interest in Bakhmut:
Offensive potential - it could open up the rest of the Donbass (or, at least it would have, if Izium was still under Russian control)
To (try to) attrite Ukrainian forces
Domestic and international politics/marketing (the idea being that Russia lost significant territory around Kherson and Kharkiv recently, so by attacking Bakhmut it allows the Kremlin to distract from the less favourable talking points)
Source here (starting around 33m 20s)
As one answer here says that Bakhmut's importance is that "Bakhmut is located on a strategic supply line between Donetsk and Luhansk". That is true but mostly irrelevant for present phase of the war because Russia controls the entire section of that road (M03 aka E40) which connects Donetsk and Luhansk. The other two cities of comparable size to Bakhmut that are near this highway, Kramatorsk and Sloviansk are also still in Ukrainian hands, despite being also being nominally annexed by Russia. Both saw rebellions in 2014, but were retaken by Ukraine. So, e.g.:
Mike Martin, a researcher at King's College London, says Russia is persisting in its efforts to capture Bakhmut because it corresponds to Putin's stated war aim of, in his words, "liberating the Donbas." Martin explains: "If you look at the way the roads and the rail networks are arranged, there are two bigger settlements to the west of Bakhmut, but still in the Donbas: Sloviansk and Kramatorsk. And in order to take those bigger cities, which he needs to do to complete his strategic goal, he needs to take Bakhmut first."
And that seems to be the official Russian line as well. According to RFERL:
Russian Defense Minister Sergei Shoigu said on March 7 that capturing Bakhmut would be key to launching a further offensive in the Donetsk region.
Also to the West of Bakhmut, albeit not on that highway but on another, albeit 2nd tier one (T0504 aka H-32), lies Kostiantynivka (pre-war pop. around 67,000) which is also in the region nominally annexed by Russia, but is still controlled by Ukraine. Kostiantynivka was also briefly captured by the rebels in 2014. Both Kramatorsk and Kostiantynivka are close enough to be in artillery range from Bakhmut, at least according to CNN:
If the Russians can take the high ground to the west of the city, nearby industrial towns Kostiantynivka and Kramatorsk would be at the mercy of their artillery and even longer range mortars.
So, yeah from Bakhmut the Russian offensive could push along two highways. Here's the ISW map from the Ukrainian defense perspective (click below to zoom--or use the previous link which allows even more interaction):
OTOH you can see from this that the Russian have other avenues to push towards Kostiantynivka, and are already much closer than the CNN analysis suggests. That red/Russian salient you see there south of Bakhmut is Klishchiivka (pop. 400), which the Russians captured in January. However getting full control of the T0504 highway would make supplying an offensive towards Kostiantynivka considerably simpler. That road and the high ground/ridge, which you can see better in the topographic map below, also have the town of Chasiv Yar (pop. 12,000) at their intersection, of sorts. Ukrainians were still in control of Chasiv Yar as of beginning of March.
So if highways still had a major importance in this war for advances, opening up the M03 West of Bakhmut could (also) matter. Russian forces capturing areas West of Bakhmut without controlling Bakhmut proper would be a bit of logistical headache for them. Blitzing along highways while avoiding major cities was a hit and miss affair in the early phases of the war due to the territorial defense forces engaging in quasi-partisan warfare (there's a good documentary here on that regarding the events around Sumy.) So the Russian strategy now is to take over and secure everything methodically, which often results in attritional battles in urban landscapes. Bakhmut is hardly the only place where that happens, see also Maryinka, which however is a much smaller settlement than Bakhmut.
Conversely, in the opposite direction, M03 runs SSE and passes between the capitals of the Donetsk and Luhansk regions, though Debaltseve, which saw an ultimately unsuccessful Ukrainian offensive in 2014 because it was retaken by the separatists in 2015. So, a putative Ukrainian counter-offensive along this axis could indeed split the two Russian controlled regions/republics, as well as envelop Donetsk city from the north. (When Prigozhin spoke of Bhakhut's importance for Russia's defense, he probably had something like this in mind.) In a war of movement, that highway could have a lot more importance than it does in the present attritional phase. The entire region has been heavily fortified by both sides, in depth, though, so major roads are more important as supply routes than quick axes of advance right now.
Also, psychologically, after Russia lost ground last fall in both the north and the south of Ukraine,
A Russian victory in Bakhmut, with a pre-war population of about 70,000, would give it the first major prize in a costly winter offensive, after it called up hundreds of thousands of reservists last year.
Bakhmut is along a major highway to Sloviansk and Izium. Highly industrialized eastern Ukraine has a lot of rail networks. Lyman, another Donetsk town, is about 20 miles NNW from Bakhmut. Its recapture by the Ukrainian military was highly significant because it's a rail hub. Russia is heavily dependent on rail for logistics, so this weakened their grip on that entire section of the country.
When Russia still controlled the area near Lyman it was more feasible for it to attempt a 'cauldron' (encirclement / pocket / kettle) in the region. In a way we are seeing the leftovers of that campaign.
Lyman was recaptured just as Russia claimed regional annexation. Russia's tried to claim an annexation of all of Donetsk despite losing control of much of the territory in a rout, so there is a political purpose to contesting Donetsk towns even when they seem marginal now. Regarding the merits of the terrain between Sloviansk and Bakhmut I cannot say.
(I am hardly an expert in this subject but have been keeping loose tabs. Consult the maps on liveuamap.com which helpfully highlight the critical rail network very well)
Bakhmut itself, a city with a prewar population of 70,000 inhabitants, has little strategic value. But the battle for the city is a marathon contest to see which army can break the other.
...Russia has thrown tens of thousands of newly mobilized troops into a huge ground assault to take the city. Ukraine has used every hard-learned tactic to hold ground and inflict maximum casualties on the invader,
Hence Bakhmut is significant for propaganda reasons, and this is true for the both sides. As propaganda is important part of every war, the Bakhmut is important as well. This is the real importance, not illusory.
Recently, however, Yevgeny Prigozhin strongly emphasized the importance of this town: if Wagner retreats from Bakhmut now, the whole front will collapse. Similarly, Volodymyr Zelenskiy also said that that retreating from Bakhmut would “open the road” for Russian forces. It is not clear what changed and if it will really be so in either case.
Recently the Institute for Study of War said they think there is a conflict between Russian Ministry of Defence and Wagner Group financier Yevgeny Prigozhin, and due that “currently prioritizing eliminating Wagner on the battlefields in Bakhmut” which it concludes is slowing its advance in the area (published here by The Guardian). If indeed so, really horrible things are evolving around this town.