Russia's Metallurgical And Coal Industries In Deep Crisis, FISU Reports

(MENAFN- UkrinForm) That is according to the Foreign Intelligence Service of Ukraine (FISU), as reported by Ukrinform.

The Russian 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 at Verkhnyaya Salda signal systemic degradation.

Enterprises are moving to shortened working week and cutting wages, prompting an outflow of personnel to related fields. The loss of skilled metallurgists threatens the long-term collapse of the industry.

Key causes include 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 temporarily support production, but their volume is shrinking. Calls for nationalization within the sector are growing.

The coal industry, which provides hundreds of thousands of jobs, is also experiencing record losses. In January–June 2025, companies reported 185.2 billion rubles in losses, exceeding 1 billion rubles per day.

The share of loss-making enterprises reached 66%, and total losses increased 26-fold compared to 2024.

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 export market, cut imports of Russian coal by 25% in H1 2025 and by 34% in Q2. Beijing also imposed a 6% tariff, which does not apply, for example, to Australian coal, the intelligence service noted.

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Amid falling exports, companies are forced to reduce extraction. Mining and metallurgical company Mechel reported a 24% decline in January–May 2025.

As reported by Ukrinform, Russian regions are massively missing planned revenue targets for the state budget, yet they continue to fund the war effort despite these shortfalls.

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