The crisis in the Russian metallurgical industry is comparable to what happened in the 1990s, said Alexander Shevelev, CEO of Severstal, one of Russia's largest metallurgical companies, which accounts for 14% of all steel production in the country, in an interview with RBC. According to him, metallurgists were hit by export restrictions related to sanctions, and the crisis was exacerbated by an unprecedentedly long period of high key interest rates by the Central Bank.
“A financial deficit can turn industrial enterprises into a pile of rusty metal in the long term,” warned the CEO of Severstal. According to him, metallurgists faced a sharp drop in demand, but a crisis of this magnitude could lead to a complete halt in development.
As previously reported by The Moscow Times* citing Rosstat data, last year, despite the demand from defense factories, Russian metallurgy reduced production by 1.5%, and this year the decline accelerated to a collapse: in June it amounted to 10.2% year-on-year.
Steel exports from Russia due to sanctions collapsed by a third: last year, 20 million tons of products were shipped abroad, compared to 31 million tons in the pre-war year of 2021.
* Recognized in Russia as a “foreign agent” and “undesirable” organization.