Domestic demand weakened faster than output in Q1 2026, leaving Russia's steel sector increasingly reliant on exports, Chermet Corporation data show.

Production and consumption both fall

Chermet Corporation data show crude steel production fell year-on-year in the first quarter of 2026. Finished rolled metal output and iron ore mining also declined.

Consumption fell faster than output. Analysts at BCS reported year-on-year declines in both flat and long steel consumption, with weakness accelerating in March.

Steel pipe production plunged, signaling reduced activity in key tubular-buying sectors such as energy and construction.

What industry analysts say

Analysts warned the market may shrink further. Industry estimates presented at a Metall-Expo organizing meeting in March suggested rolled metal market capacity could fall by the end of 2026 versus 2025, with early-year sales sharply down in some segments.

Other analysts pointed to tight monetary policy and high interest rates as drags, saying weaker construction activity — the single biggest domestic buyer of steel — is feeding through into orders for metal products.

Exports have softened but offered relief

Exports provided a partial cushion. In March, producers shipped outbound steel products via the national rail network, and slabs became an important source of foreign-currency earnings for some steelmakers. In 2025, slab deliveries to the European Union rose versus the prior year, with consignments sent to Belgium, Italy and the Czech Republic.

  • The existing EU quota for slab imports is limited and scheduled to be tightened in coming years, narrowing space for exports to Europe.
  • Rerouting flows to Asia, Africa and Latin America could offset some lost EU demand but will be difficult to achieve.
  • Shipments to Middle Eastern markets weakened in 2025 and remain below levels earlier in the decade.

Imports, price pressure and industry demands for support

Domestic producers face pressure from rising imports, especially cheaper finished goods from China, which are cutting into local mill volumes and squeezing margins. The Russian Steel Association has proposed measures such as lower taxes on producers and stronger protections for the domestic market.

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Chermet Corporation data show crude steel production and consumption fell in Q1 2026, underscoring pressures on the industry as producers lean on exports and seek policy support.