The Metallurgical Plant of Russia announced a landslide drop in steel output
Magnitogorsk Iron and Steel Works, one of the largest in Europe and the second largest in Russia, announced a sharp drop in production. Thus, amid sanctions, export problems and a slowdown in the Russian economy in the second quarter of 2025, MMK reduced steel output by 18% to 5.2 million tons, while pig iron production fell by 9% year-on-year.
This is evidenced by the company's report, The Moscow Times reports.
MMK's sales fell in all types of products: rental products – by 13%, long products – by 11%, premium products – by almost 20%.
According to analysts, the company's results are "predictably weak": MMK is under pressure from low demand in the country due to the high key interest rate of the Central Bank of the Russian Federation. In the first quarter, the plant, owned by billionaire Viktor Rashnikov (worth $11.2 billion, according to Forbes), became unprofitable: it lost 1.2 billion rubles.
According to the results of last year, Russia's largest steel producer, Novolipetsk Steel (NLMK), was in the red: it received 0.3 billion rubles. pure damage.
In general, as noted, the Russian steel industry has plunged into a full-fledged crisis: export prices for Russian steel have dropped by 5% in dollars and 26% in rubles since the beginning of the year, and domestic demand has been affected by the crisis in construction.
According to the World Steel Association, steel production in Russia fell by 8.6% last year, a record among all major producing countries, and by another 7.2% in January-April of this year. Exports have fallen by a third since the start of Russia's full-scale war against Ukraine: last year, Russian steelworkers exported 20 million tons of products abroad, compared with 32 million tons in 2021.
Alexander Shevelev, CEO of Severstal, said earlier that due to falling demand and expensive loans in the country, there is a risk of a complete shutdown of metallurgical plants.
It was also reported that the Russian authorities are developing a plan to support Russian steel plants, which faced a sharp drop in exports, slipped into losses and were forced to reduce production. Thus, the Russian government is considering the possibility of reducing the tax burden for steel producers.