The crisis in the Russian metallurgy industry due to sanctions restrictions on exports and a prolonged period of high key interest rates by the Central Bank is already comparable to the crisis of the 1990s.
Points of attention
- Russian metallurgy industry is in a dire crisis due to sanctions restrictions and reduced demand for steel.
- Steel production in Russia is declining rapidly, with exports suffering a significant decrease.
- The crisis in Russian metallurgy could lead to a complete halt in the industry's development, impacting the country's industrial base.
The crisis in the Russian metallurgy industry is gaining momentum
This was stated by Alexander Shevelev, CEO of PJSC Severstal, which provides 14% of steel production in the Russian Federation.
Demand for steel has plummeted, and the biggest threat from the current crisis is a complete halt to the industry’s development. According to Rosstat, last year Russia’s steel output fell by 1.5%, and this year the decline accelerated to a catastrophic 10.2% in June year-on-year. Exports have also “sagged”: in 2024, 20 million tons were shipped abroad, compared to 31 million in 2021.
The Center for Countering Disinformation has already written that the metallurgy industry in Russia is experiencing the deepest crisis since the beginning of the Russian Federation's full-scale invasion of Ukraine.
The war is gradually “eroding” Russia’s industrial base. The Kremlin is trying to cover up the true state of affairs by claiming that sanctions are causing no harm and that the economy is experiencing unprecedented growth.
However, the rapid decline of key industries is hitting the Russians themselves harder and harder, as they increasingly finance the war from their own pockets.
