Russia’s second-largest steel producer has reported a sharp drop in output, underscoring the growing pressure on the country’s steel industry from sanctions, export hurdles and weakening domestic demand.

In its second-quarter report released Thursday, Magnitogorsk Iron and Steel Works (MMK) said steel production fell 18% year-on-year to 5.2 million tons, while pig iron output dropped 9%.

Sales were down across all segments, with rolled steel declining 13%, long products 11% and premium steel nearly 20%.

Analysts at state-owned Promsvyazbank described MMK’s results as “expectedly weak,” citing weak domestic demand driven by the Central Bank’s high interest rates.

MMK reported a first-quarter loss of 1.2 billion rubles ($15.3 million).

The downturn is industry-wide. Novolipetsk Steel, Russia’s largest steelmaker, posted a net loss of 300 million rubles ($3.8 million) in 2024.