Magnitogorsk Iron and Steel Works (MMK), one of Russia’s largest steel producers, has reduced capacity utilization to 60%, almost completely halted investment and equipment repairs, and is also preparing to cut 10% of its management staff. This was announced by the company’s CEO Pavel Shilyaev in an address to employees.
Shilyaev clarified that the production capacities of Russian steelmakers exceed market demand by two times. No recovery in demand for metal products is expected in 2026.
At MMK, a set of cost-cutting measures is being implemented. We are optimizing warehouse inventories and have significantly reduced equipment repairs. We have practically stopped implementing our investment program.
MMK has also decided to reduce headcount in line with the utilization of production capacities. Thus, the number of management personnel at all levels will be reduced by 10%. Workers of retirement age, on whom the enterprise had relied amid a labor shortage, were also offered to go on leave.
Metallurgy is the most sensitive barometer of the economic situation, and today the industry’s position is very difficult. This has fully affected MMK as well.
In early March, MMK beneficiary Viktor Rashnikov said that the enterprise is operating at minimum profitability, which does not allow companies in the industry to fully develop and invest.
Earlier, "Pervyi tekhnicheskii" in a major overview article explained which industries in Russia are not in the best condition. A wave of bankruptcies has swept over factories in key sectors — from aviation to heavy engineering.