Russian metallurgy is experiencing a deep crisis after the start of the full-scale war against Ukraine: the industry has lost part of its foreign markets, faced a decline in demand and technological isolation. This was reported by the Foreign Intelligence Service of Ukraine, writes UNN.
Details
According to the Foreign Intelligence Service, after the start of the major war in Russia, the demand for steel in construction and mechanical engineering decreased, while the costs of energy resources, raw materials, and logistics increased. Because of this, the cost of production increased, and the profitability of enterprises sharply fell.
External restrictions also dealt an additional blow. Some traditional sales markets for Russian metal products reduced purchases or reoriented to other suppliers. Against this background, capacity utilization decreased, and some enterprises could no longer withstand the financial pressure.
Meanwhile, the Kremlin is redirecting resources to military needs, effectively abandoning metallurgy to its fate. The industry, which always fed Russia and pushed its technological progress, has become a hostage to Putin's political decisions. Without budget support and investment, this complex system begins to crumble.
The industry is losing modernization
The Foreign Intelligence Service also notes that Russian metallurgy has lost access to some technologies and modernization due to sanctions and the withdrawal of foreign partners. Banks, in conditions of instability, are cautious about financing, and companies are forced to maintain liquidity instead of investing.
Another factor was the reorientation of resources to military needs. Due to reduced production and closure of workshops, the consequences of the crisis are already being felt by industry workers. According to Ukrainian intelligence, this indicates deeper structural problems in the Russian economy.
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