The head of one of Russia’s largest steel producers has warned of imminent production cuts and plant closures in the country’s steel industry as a strengthening ruble and high interest rates choke off demand and profitability.

The steel industry, which employs more than 600,000 workers and accounts for roughly 10% of Russia’s export revenues, has long been a pillar of the nation’s heavy industry.

Speaking at the St. Petersburg International Economic Forum on Thursday, Severstal CEO Alexander Shevelev said the industry could be unable to sell up to 6 million metric tons of steel this year, nearly 10% of last year’s total output.

The current forecast for domestic steel consumption predicts that demand could fall from 43-45 million tons to just 39 million tons this year, he said.

“That’s effectively the disappearance of an entire industry’s worth of demand,” Shevelev said.

At the same time, exporting steel has become unprofitable due to the sharp appreciation of the ruble.

“The industry … today is practically unable to export metal products, because it is economically unviable,” Shevelev said.

He said that an exchange rate of 90-100 rubles to the dollar, as well as a reduced key interest rate, would allow steel producers to stay competitive and revive business activity in steel-consuming industries.

“But for now, everything is heading toward the fact that we may see production halts at some plants, especially those struggling with high production costs,” he warned.