Russia’s steel industry is facing its worst crisis of the decade as thousands lose jobs and incomes fall. The sector employs around 700,000 people and accounts for nearly one-fifth of the country’s industrial output, Ukraine's Foreign Intelligence reports. 

Production drops and staff cuts threaten industry stability

Falling demand, high credit costs, and worsening financial results have forced most Russian steel plants to reduce personnel. The sector, which lost a third of its exports due to sanctions and closed Western markets, is experiencing a crisis comparable to the 1990s.

Key production declines in 2025:

• July – down 10.2%;
• August – down 8.4%;
• Magnitogorsk Iron and Steel Works (MMK) – steel -18%, pig iron -9%;
• Mechel – sales -11%;
• TMK – steel pipes -18%, seamless pipes -22%.

Major companies report crisis-level financial results

According to Russian steel company Severstal’s financial report, net profit in Q3 2025 fell threefold to $160.4 million, and over the first nine months of the year, it dropped 57% to $614.4 million. Revenue fell 18% for the quarter and 14% for nine months.

Free cash flow turned negative, at -$262.4 million from January to September, and cash reserves nearly halved, from $1.59 billion to $892 million. The board decided not to pay dividends for Q2 and Q3 2025.

Stagnant domestic demand and falling export margins signal further losses

Amid a 15% drop in domestic demand and declining export profitability, Russian steel companies expect continued deterioration in financial performance in Q4 2025.

Ukraine on July 6 imposed sanctions aimed at countering Russian financial schemes, including those involving cryptocurrency, President Volodymyr Zelensky announced in his evening address.

Restrictions were imposed on 60 legal entities and 73 Russian citizens.

The latest sanctions package includes Ukrainian-led initiatives and must also align with restrictions imposed by international partners, according to Zelensky.

Ukraine will continue working with its partners to coordinate sanctions across different jurisdictions in the future, he added.

Zelensky also announced that the Ukrainian government is set to unveil new measures next week, aimed in part at aligning with European Union sanctions against Russia.

"All European packages against Russia should be implemented in the Ukrainian jurisdiction. Just like Ukrainian sanctions in the European Union," Zelensky said.

At the end of June, Zelensky imposed sanctions on 52 Russian citizens, 34 Russian companies, and one Chinese entity involved in the production of Shahed drones and chip manufacturing machinery.

Drones have become one of the defining tools of the full-scale war, used extensively by both Ukraine and Russia for surveillance, long-range strikes, and tactical battlefield advantage.

Ukraine’s artillery braces for shell shortage as US halts aid

The Kyiv Independent’s Francis Farrell and Olena Zashko spent a day with an artillery crew from the 28th Mechanized Brigade in the front-line city of Kostiantynivka. Following the recent decision by the Pentagon to halt shipments of certain weapons to Ukraine, a looming shell shortage is once again on the horizon for Ukrainian forces.

The Kyiv IndependentFrancis Farrell