Russia’s metallurgical industry continues to decline and is now on the verge of complete shutdown.
That is according to the Foreign Intelligence Service of Ukraine (FISU), as reported on Facebook and cited by Ukrinform.
“Russian metallurgy continues to deteriorate: in 2024, steel production dropped by 8.6%, and in Q1 of 2025, it fell another 7.2%. Export prices declined by 26% in ruble terms, and domestic demand is expected to shrink to 39 million tons, compared to 43–45 million tons last year. Foreign sales are also falling, down 6 million tons, or about 10% of 2024 volumes,” the post reads.
The agency reports that major producers are cutting operations and recording losses.
“The Magnitogorsk Iron and Steel Works reported a steel production decline of 18% and a 9% drop in pig iron output. Product sales have dropped by 11–20%. Meanwhile, the Novolipetsk Steel reported $15.77 million in losses in Q1 2025, while sales profits fell 11-fold,” the FISU noted.
In contrast, Severstal’s largest shareholder, Alexey Mordashov, received 201.8 billion rubles in dividends, of which 200 billion came from Severstal itself. At the same time, company management publicly warned of the threat of a full industry shutdown, the report states.
Despite government assurances of potential tax relief for metallurgists and plans for infrastructure projects, the budget deficit and fiscal constraints cast doubt on the feasibility of such measures, Ukraine’s intelligence agency add.
“The high risk of unemployment in Russia’s industrial regions could escalate into social unrest,” the FISU warns.
Previously, Ukrainian intelligence reported that strikes had begun across Russia due to unpaid wages, with the worst-hit sectors being coal mining, construction, metallurgy, and agricultural machinery manufacturing.
Source: Russian metallurgy on brink of collapse – Ukrainian intelligence
