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The Russian Steel Association stated that the Russian steel industry is experiencing one of the longest crises in its history, with crude steel production projected to fall to 66.5 million tons by 2025, and domestic steel consumption at only 38.9 million tons.
The association pointed out that low export profitability and escalating sanctions pressure are the core reasons for the current deteriorating situation. M95-27P Grain oriented electrical steel, The industry is calling on the government to re-examine the steel consumption tax system, reduce the overall tax burden, and alleviate the operational pressure on steel companies by supporting downstream consumption and easing monetary policy.
Experts generally predict that the industry may only see a limited recovery in 2026, and it will take several years to return to pre-crisis levels. In a letter to First Deputy Prime Minister Manturov, the Russian Steel Association pointed out that against the backdrop of a rapidly deteriorating macroeconomic environment, steel prices have fallen to a near 11-year low, while the costs of various production factors such as raw materials, energy, and logistics continue to rise. M95-27P Grain oriented electrical steel, Even the most efficient steel mills have begun to experience negative cash flow, making it difficult to maintain the approximately 15% profit level needed to support production and investment.
The association further requested that the Ministry of Finance, the Ministry of Industry and Trade, and the Ministry of Economic Development jointly promote the revision of the tax law, raising the "starting price" of the steel consumption tax to 43,470 rubles per ton (approximately US$548), and making annual indexation adjustments based on the inflation level starting from April 1, 2026.
The association emphasized that the current starting price of 30,000 rubles per ton has lost its regulatory significance, as the production cost of slabs has already exceeded 40,000 rubles per ton. Several Russian steel companies confirmed the contents of the relevant meetings and letters.
Previously, the Russian Steel Association had predicted that domestic steel demand would decline by 14% year-on-year in 2025, hitting near its lowest level since 2016.
Russian steel producer and mining company Severstal also stated that high interest rates and tight monetary policy are suppressing business activity and dragging down steel consumption. Although the Russian central bank has lowered the benchmark interest rate from 17% to 16.5%, the industry believes that the reduction is insufficient to stimulate a recovery in demand. M95-27P Grain oriented electrical steel, Only when interest rates fall to around 12% will steel consumption be able to see a substantial recovery.
