Germany wants an embargo on steel from Russia. This is a blow to the Kremlin's oligarchs' corporations.

"We must completely halt steel imports from Russia as soon as possible," Klinkbeil emphasized in a statement to the DPA news agency ahead of the steel summit, which will take place in Berlin on November 6. The politician expressed outrage that Russian steel and steel products are still not subject to European Union sanctions. "It is impossible to explain to any employee of our steel industry that Europe continues to keep its market open to Putin," the Vice Chancellor stated.

Russian steel mills in crisis

Klinkbeil also called for "greater European patriotism" in response to global overcapacity and dumping prices, proposing increased domestic production and an emphasis on high-quality, environmentally friendly steel from Germany and other EU countries.

Meanwhile, as The Moscow Times notes, the Russian steel industry is experiencing a deep crisis even without the EU embargo. As Reuters reported in October, citing industry sources, almost all Russian steel mills have begun laying off workers due to falling demand, high borrowing costs, and deteriorating financial results.

According to Alexander Sheveliev, CEO of Severstal (a concern sanctioned by oligarch Alexey Mordashov), the industry, which has lost Western markets and a third of its exports due to sanctions, is experiencing a crisis comparable to the 1990s.

Even data from Rosstat (Russia's statistical office), which has been accused of creative statistics, indicate a sharp deterioration in results: in July 2025, steel production volumes fell by 10.2 percent year-on-year, the worst result since the beginning of the Russian war in Ukraine.

The metallurgical concerns of the oligarchs generate losses

The largest companies in the industry are reporting significant production declines. The Magnitogorsk-based MMK concern saw its steel production drop by 18% and its pig iron by 9% in the second quarter. At the Mechel concern, steel sales fell by 11% in the first half of the year, while TMK lost 18% of its steel pipe sales and nearly 22% of its seamless products sales.

This is accompanied by increasingly poor financial results. In the first half of 2025, TMK reported a net loss of 3.2 billion rubles, Mechel over 40 billion rubles, MMK 4.8 billion rubles, and Severstal 29.1 billion rubles. According to Sheveliev, steel producers may face an inability to sell up to 6 million tons of steel this year, which is almost 10% of last year's production.

"The metallurgical industry is in very bad shape. Sanctions have hit Russian raw material exports, which has had a negative impact on steel producers," says economist Nikolai Kulbaka. He estimates that last year, Russian steel exports fell by a third compared to pre-war levels. If the EU were to join the US and UK sanctions now, the blow could quickly devastate the entire Russian steel industry, dominated by Kremlin-aligned oligarchs.