Russian steel consumption seen falling 4–11% in 2026 as construction stalls

Steel consumption in Russia could decline by 4–11% in 2026, according to forecasts from analytical centres cited by Pravda.ru. The Russian outlet describes the domestic market as bracing for a substantial contraction, with the depth of the fall depending mainly on construction activity and on how many large state-funded projects are completed without being replaced by new ones.

Construction accounts for more than 70% of demand

Construction currently consumes more than 70% of all steel produced in Russia, Pravda.ru reports. The sector takes more than two-thirds of steel product sales in the country, concentrated in three main categories:

• reinforcing bar for concrete construction;
• rolled steel;
• fabricated metal structures.

With demand that concentrated, mill order books track the construction cycle almost directly. Any slowdown in housing commissioning or a freeze on infrastructure sites immediately deprives plants of orders, the publication notes. The current forecast rests on the assumption that a series of large state programmes in energy and infrastructure reach completion, removing a block of demand that has underpinned volumes in recent years.

Regions whose economies are closely tied to state orders will be the first to feel the market cooling, according to Pravda.ru. That makes the impact uneven: plants serving federally funded construction clusters are more exposed than those with a diversified customer base.

Imports add a second layer of pressure

Alongside the domestic squeeze, Russian mills face intensifying competition from import suppliers. Pravda.ru describes the result as double pressure: falling physical sales volumes combined with the need to hold prices at competitive levels. That combination narrows the usual response to weaker demand, because producers cannot defend margins through pricing while competing imported material is available on the domestic market.

Output and exports expected to follow demand down

Weaker domestic demand will inevitably affect the financial stability of producers, particularly those oriented towards the home market, the outlet reports. Experts it cites expect that 2026 will bring declines not only in consumption, but also in crude steel output and in export shipments — an unusual combination, since falling domestic sales would normally push tonnage towards foreign buyers.

Macroeconomist Artyom Loginov assesses that the metallurgical industry is entering a cycle of tight dependence on budget spending and on the investment capacity of the private sector, which is currently constrained by the cost of borrowed capital. On that reading, a recovery in demand requires either new state programmes or cheaper credit, since private investment cannot substitute for shrinking public orders at current financing costs.

Still a forecast, not an outcome

Pravda.ru stresses that the 4–11% range remains a projection. The actual figures will depend on the launch of new large projects and on the ability of companies to find alternative sales markets — an option the outlet describes as difficult under current sanctions restrictions. For producers planning capacity utilisation and maintenance schedules for 2026, the gap between the two ends of the range is material: the lower bound implies a manageable slowdown absorbed by inventory and pricing discipline, while the upper bound points to idled lines and a harder set of decisions on output. The forecast also sharpens the question of product mix, since demand tied to housing and infrastructure is concentrated in long products and structural steel rather than spread evenly across the range.