Russian metallurgy has lost a third of its exports: the industry is plunging into crisis

Enterprises report a drop in production, losses and mass layoffs.

The Russian metallurgical industry, which provides about 20% of the country’s industrial production, has found itself in the deepest crisis in recent decades. This was reported by the Foreign Intelligence Service of Ukraine.

Due to sanctions and the closure of Western markets, Russia has lost a third of its metal exports. In July, steel production fell by 10.2%, in August – by 8.4%. The largest enterprises record a record decline in volumes and profitability:

• Magnitogorsk Metallurgical Plant reduced steel output by 18% and pig iron by 9%;

• Mechel reduced sales by 11%;

• Pipe Metallurgical Company (TMK) – by 18% for steel pipes and 22% for seamless ones.

All three companies ended the first half of the year with losses: Mechel — over 40 billion rubles, TMK — 3.2 billion, MMK — with a negative cash flow of 4.8 billion.

Severstal, which provides about 14% of Russia’s steel production, was also not spared problems. In the first nine months of 2025, its net profit decreased by 57% (to $614 million), revenue — by 14%, and cash flow became negative. The company announced the cancellation of dividends and a decrease in liquidity by almost half — to $892 million.

Due to the loss of export markets, Russian metallurgy is trying to reorient itself to Asia, but new directions do not compensate for the volumes of the EU and the USA, which previously formed the bulk of foreign exchange earnings. At the same time, domestic demand for metal in Russia decreased by 15%.

Experts predict that by the end of the year, the decline in production and profits will continue, and the industry may enter a protracted recession comparable to the crisis of the 1990s.

Meanwhile, as USM wrote the day before, Russia’s seaborne exports of crude oil are now continuing to grow.