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.