Crude Steel Output Suffers Annual Decline
Russia’s major steelmaker MMK Group has reported a notable year-on-year drop of 13.4% in crude steel output for the first quarter of 2025, reaching 2.57 million metric tons. This comes despite an 8.6% increase quarter-on-quarter, largely attributed to recently completed furnace upgrades that temporarily boosted production capabilities.
The annual dip reflects broader challenges in the sector, including maintenance schedules and macroeconomic volatility that continue to affect both operational capacity and demand.
Pig Iron Production Trends
Pig iron production mirrored similar trends. The group saw a 2.5% increase in pig iron output compared to Q4 2024, thanks to resumed operations following temporary shutdowns. However, output still fell 6.9% year-on-year, underlining the lingering impact of furnace repairs and limited throughput during the same period last year.
Steel Sales Show Mixed Results
MMK’s steel sales demonstrated some resilience with a 2.8% quarter-on-quarter increase, suggesting short-term recovery as production facilities returned online. However, on an annual basis, sales were down 11.1%, hit hard by global macroeconomic pressures, logistical constraints, and operational repairs that disrupted supply consistency.
These numbers reflect an ongoing struggle to regain pre-disruption levels amid rising costs and uncertain external demand.
Premium Products Weaken from Construction Slump
A sharper impact was felt in the premium steel segment, especially cold rolled and coated products, which are heavily used in construction and infrastructure projects. Premium product sales dropped 6.0% quarter-on-quarter and 3.7% year-on-year, mainly due to weak construction activity and sluggish downstream demand across Russia and key export markets.
This decline signals reduced investment in sectors traditionally reliant on high-quality steel finishes and specialized materials.
Strategic Outlook Amid Global Uncertainty
MMK has focused on furnace upgrades and efficiency improvements to stabilize quarterly output and remain competitive. However, macroeconomic uncertainty—coupled with geopolitical risks and volatile raw material prices, continues to shape the company's medium-term outlook. Analysts suggest MMK may adjust its product mix strategy, lean on domestic infrastructure projects, or increase exports to Asian & MENA markets to offset current losses.
Key Takeaways:
• Crude steel output fell 13.4% YoY to 2.57 million mt, despite an 8.6% QoQ increase.
• Pig iron production rose 2.5% QoQ but declined 6.9% YoY due to repairs.
• Steel sales increased 2.8% QoQ but dropped 11.1% YoY, impacted by macroeconomic challenges.
• Premium product sales decreased 6.0% QoQ and 3.7% YoY, hurt by weaker demand in construction.
• Furnace upgrades helped stabilize output, but global and domestic pressures weigh on MMK’s performance.
