Russian government vows rescue as Collapse of Steel Industry Accelerates
Russia’s steel sector is facing mounting pressure from a combination of collapsing domestic demand and hostile export conditions, prompting officials to promise sweeping support measures in a bid to stabilize one of the country’s most critical industrial sectors.
Speaking before the Federation Council on Wednesday, Industry and Trade Minister Anton Alikhanov acknowledged that Russia’s ferrous metals industry saw a steep contraction last year, with steel smelting, finished rolled products, and steel pipe production all falling by 7% in 2024 , then an additional drop 7% in only the first 5 months of 2025.
Alikhanov blamed the downturn on a confluence of domestic and international factors. Within Russia, demand for steel has been severely impacted by slowdowns in both construction and mechanical engineering—two of the industry’s largest clients. In addition, high interest rates and restricted lending have hampered growth in sectors such as housing and consumer goods, further weakening the market.
Externally, the industry is being undercut by a surge in dumping imports, which rose 16.3% in the January–April period compared to the previous year. At the same time, Russia’s steel exports have come under pressure due to falling global prices and a strengthening ruble, which has made Russian steel less competitive abroad.
“The situation is serious,” Alikhanov told lawmakers. “Given the scale of the industry, demand must be revived in order to restore growth.”
To that end, the Ministry of Industry and Trade plans to activate what Alikhanov called the “entire arsenal of support measures.” While he did not detail specific interventions, such measures are expected to include subsidies, tariff adjustments, and potentially favorable rail transport rates, echoing tactics previously deployed to support Russia’s coal and automotive sectors.
But even with state intervention, the outlook remains grim unless broader macroeconomic conditions improve. Alikhanov emphasized the need for large-scale infrastructure construction under new national projects, as well as a revival of lending across multiple sectors, as the only sustainable path toward restoring steel demand.
The deterioration in Russia’s steel industry adds to growing concerns about the health of the country’s broader industrial base. Combined with recent warnings of a 40% collapse in the auto market and falling industrial output, the pressure on Moscow to stimulate demand and reinvigorate manufacturing has rarely been higher.
Without bold action, one of Russia’s foundational industries may face further contraction—undermining not only economic growth but the very pillars of the Kremlin’s wartime industrial strategy.
