MOSCOW (Realist English). May 2026 became a month of paradoxes for Russian metallurgy: against the backdrop of continued falling domestic demand and increasing sanctions pressure, global steel prices soared to highs not seen since late 2024, creating a rare window of opportunity for the industry.
However, this window was almost completely blocked by a strong ruble and high costs. The key question now being discussed by market participants is how sustainable this growth will be.
Steel Market: Supply Shortage and Price Shock
Summer on the Russian steel products market began unexpectedly turbulently: spot prices rose throughout May, and in June producers announced increases across the market, in some places up to 10% relative to May. However, the key driver of this growth was not surge demand, but an acute supply shortage. Metallurgists, facing a collapse in demand back in the first quarter and a lack of working capital, significantly reduced production.
As a result, metal traders, finding themselves with empty warehouses on the eve of the summer season, are unable to replenish stocks from the primary market, while end-users are not showing much enthusiasm. Analysts agree that the market has entered an unstable equilibrium, and sooner or later producers will ramp up capacity to full, which could cause prices to collapse.
Price dynamics clearly reflect this tension: the metal trading price index in the Central region steadily rose throughout the month. In the first week of May, the index jumped 4.8 points (+0.6%), driven by the largest increase in rebar prices (+2.9%).
By the end of the third decade, growth continued, adding another 4.6 points (+0.57%), with angle bar this time leading the price increase (+2.94%). At the same time, flat galvanized rolled products became slightly cheaper.
The global market since May 2026 has also shown mixed signals: while prices in China, Vietnam, and Turkey are falling and Indian producers are expanding their presence, growth continues in the US. Analysts expect further price declines amid falling demand, but in Russia, moderate optimism is forecast for the summer, followed by a correction closer to autumn.
Metallurgists’ Finances: Ruble Pressure and Collapsing Margins
The positive effect of global price growth was almost completely neutralized for Russian companies. Export steel prices have risen 15% since the start of the year, reaching $510 per ton (FOB), but in ruble terms the increase was only about 8% due to the strengthening of the national currency. The situation on the domestic market is even more depressing, where hot-rolled coil prices have risen only 3.5% since the start of the year (to approximately 46,000 rubles/ton), remaining in negative territory compared to the second quarter of 2025.
Financial reports of major companies were weak: in the first quarter of 2026, EBITDA of Severstal and MMK more than halved year-on-year, free cash flow turned negative, and dividends for the period were not recommended. Steel consumption in the country continued to fall, declining by 12-14% in the first quarter depending on the type of rolled products. Analysts attribute this to weak activity in construction and infrastructure projects, as well as high interest rates that are stifling investment activity.
Analysts at major banks have revised down their target prices for metallurgical companies. Alfa-Bank lowered its targets: for Severstal from 1,015 to 890 rubles, for MMK from 35 to 28 rubles, for NLMK from 131 to 108 rubles.
T-Investments and Alfa-Bank maintain conservative “hold” or “sell” recommendations, emphasizing that the strong ruble and weak domestic market prevent companies from fully benefiting from rising export prices.
Exports: Surge and Signs of Cooling
Metal exports in the first quarter of 2026 were one of the few bright spots, showing an impressive 34.7% increase in value terms to $19.2 billion against the backdrop of a general decline in Russian exports.
The most striking examples include a 2.4-fold increase in copper exports to Turkey in March to $150.3 million, and a sharp 87% increase in pig iron supplies to Turkey (to 553,000 tons in the first quarter), where Russia’s share approached 90% of the market. The growth in pig iron and copper exports is attributed to a reorientation of flows and reduced supplies from China.
However, by the end of May the situation began to change: due to weak demand in Turkey and pressure from Chinese producers, export prices for Russian steel billets began to decline, falling to $485–488 per ton FOB by May 29.
Sanctions Pressure: New Challenges
Sanctions pressure on Russian metallurgy continues to intensify. In May 2026, the US introduced a new package of restrictions that targeted structures of Evraz (including NTMK) and Nornickel.
In response, Russia warned of the possibility of closing its market to American goods. In parallel, the EU, as part of preparing its 20th sanctions package, is discussing a ban on imports of a wide range of products: nickel, iron ore and concentrates, unrefined and processed copper, as well as various types of scrap.
Also under discussion is adding third-country ports used to circumvent restrictions to the lists. Since the end of April, restrictions on imports of ferrous and non-ferrous metal waste and scrap have been in effect.
Industry Events: New Contracts and Congresses
In May, industry life was full of events. The service metal center UPTK-65 signed a contract with Magnitogorsk Iron and Steel Works, adding a third steel giant to its pool of key flat-rolled suppliers, alongside existing contracts with Severstal and NLMK.
On May 29, the XXIX Annual Congress of the Russian Union of Metal Products Suppliers was also held in Moscow, where company leaders discussed results and plans. Alexander Romanov was once again unanimously elected president of the union.
Conclusions
May 2026 became a stress test for the resilience of Russian metallurgy. On the one hand, companies faced an acute crisis in the domestic market: falling demand, a strong ruble, and high interest rates are squeezing margins.
On the other hand, rising global prices and reduced supplies from China opened a window of opportunity for Russian exporters, but that window had already begun to close by the end of the month. In the medium term, the industry faces a period of prolonged stagnation and intense competition, where only the most efficient players will survive.