MMK, one of the key steel industry representatives and the largest flat steel manufacturer in Russia, has recently announced significant cuts in output as well as worker lay-offs. The general crisis in the steel sector in Russia deepened in 2025 with quite a poor outlook for 2026. The main factor is the falling consumption of steel products in the country amid high interest rates, coupled with challenging exports due to pressure from sanctions.
According to the company’s announcement, the capacity utilization rates of MMK have been reduced to 60 percent while in 2025 they stood at 70-80 percent. Particularly, the group will idle the facilities which are not utilized due to the limited amount of orders. “They have stopped a blast furnace, a converter and a bunch of other downstream and upstream equipment, so they are not as dependent on the volume of orders,” a local market source told SteelOrbis.
In addition to lower production rates, MMK has also announced it will be undergoing a cost-cutting program. “We are optimizing stocks and have significantly cut maintenance works at equipment. We have practically stopped our investment program and preserved only the projects which are impacting the production efficiency and environmental policies. A complicated decision to suspend non-utilized facilities was taken and it influenced almost all assets of the group,” MMK statement reads. In addition, MMK has taken a decision to decrease the number of workers by 10 percent, which is also a signal of the company’s tough situation.
According to local Russian statistics, in 2025 the construction sector, which is the key steel consumer in the country, showed a growth rate of 2.5 percent, which is the lowest in the past five years. The outlook for 2026 is even weaker - from 1.0 to 2.5 percent in the optimistic scenario and from 0 to one percent in the pessimistic one. One of the reasons is the high interest rate, which has been decreased from late 2025 by a total of one percentage points in two steps to the current level of 15 percent.
In 2025, MMK posted a net loss of RUB 14.8 billion (almost $180 million according to $1 = RUB 82.3), while net revenue of the group decreased by 20.6 percent to RUB 609.9 billion ($7.1 billion).