A Wave of Defaults Awaits the rf’s Coal Sector

In the third quarter of 2025, systemic imbalances in russia’s coal industry deepened, pushing the sector into a state of sustained crisis. According to available data, 74 % of companies are operating at a loss, while 23 % have completely stopped production. The industry’s total losses reached $3.32 billion and are estimated to grow to $4.42 billion by the end of the year. Current dynamics shows that the situation is unstable, but the key deterioration is yet to come.

Coal production has been declining for the third year in a row. Last year, the sector recorded losses of $1.41 billion and accounts payable of approximately $15.1 billion. The share of loss-making enterprises was 53 %. By the end of 2025, the debt burden may grow to approximately $18.9 billion, complicating access to financing and increasing the risk of chain bankruptcies.

The deterioration in the outlook is due to the loss of traditional markets following russia’s full-scale invasion of Ukraine, a sharp drop in export prices from $148–192 per ton in 2022 to $72–106 in 2024 – and restrictions on eastern infrastructure, which block a rapid reorientation towards Asia.

The crisis is also deepening among private producers. In the third quarter of 2025, “Mechel” reduced production by 55 % compared to last year, to 1.28 million tons, and by 38 % over nine months. The company’s net loss in the first half of the year increased 2.4 times to $5.69 billion – the highest level since 2015.

Companies with weaker financial positions may default within the next 6–12 months. At this, some large private players risk facing forced restructuring or de facto transfer to state control. The temporary support mechanisms introduced by the government are not proving effective, and in 2026, the share of insolvent enterprises will only grow.