russia’s Metallurgical and Coal Industries Are in Deep Crisis

The rf’s metallurgical industry is experiencing a sharp decline: only 150 million tons of steel were produced in the first half of 2025. The closure of the Beloretsk Metallurgical Plant in Bashkiria and a 60 % decline in production in Verkhnyaya Salda signal systemic degradation. Companies are switching to a reduced working week and cutting wages, which is provoking an outflow of personnel to related fields. The loss of skilled metallurgists threatens with the long-term destruction of the industry. Among the key reasons there are sanctions that have closed access to European markets, fierce competition with China, investment restrictions, and the Central Bank’s credit policy, which is paralyzing the construction sector – the main consumer of metal. Defense orders are temporarily supporting production, but their volume is declining. Calls for nationalization are growing within the industry.

The coal industry, which provides hundreds of thousands of jobs, is also experiencing record losses. In January–June 2025, companies recorded losses of 185.2 billion rubles – more than 1 billion rubles per day. The share of loss-making enterprises reached 66 %, while total losses increased 26 times compared to last year. In Kuzbass, which provides up to 80 % of russia’s coking coal, 17 mines have shut down, and another 27 companies are on the verge of bankruptcy. Over the past 20 years, the region has lost about 300 enterprises. China, a key market, reduced imports of russian coal by 25 % in the first half of the year and by 34 % – in the second quarter. Beijing also introduced a 6 % tariff, which does not apply to Australian coal, for example. Against the background of falling exports, companies are forced to cut production. Mechel reported a 24 % decline in January–May.