Russia is considering a moratorium on bankruptcies in the metals industry, a government document showed on Wednesday, in a sign of growing concern about a sector struggling with falling demand, high interest rates and a strong rouble.
The document, a protocol from the government’s financial stability commission meeting on August 28, asked the economy and industry ministries to present proposals by October 28 on the advisability of introducing an effective ban on bankruptcies in the sector.
The news was first reported by the Kommersant daily.
The move, part of wider measures to support the sector, would follow similar action to help the struggling coal industry, which included tax deferrals and limiting dividends and bonuses for top management.
The Economy Ministry declined to comment.
Russia is the world’s fifth-largest steel producer, with output of about 71 million tons in 2024.
One of its leading steelmakers, Severstal, estimated in July that first-half steel demand fell by up to 15% due to a high key interest rate. That, along with low prices, led to a 55% fall in the company’s net profit in the second quarter, it said.
The central bank’s board is set to convene on September 12 to decide on the key rate. Analysts polled by Reuters expect a 200 basis-point cut, as the economy is slowing faster than expected while inflation is receding.
The Russian economy is expected to slow to 1.2% growth from 4.3% last year.
A think-tank advising the government said in a research note in January that Russia could face a wave of corporate bankruptcies this year as the share of enterprises with risky levels of debt doubled in 2024.
The government and the central bank dismissed such warnings, saying the situation was under control.
(By Gleb Bryanski, Darya Korsunskaya, Anastasia Lyrchikova and Gleb Stolyarov; Editing by Guy Faulconbridge and Jan Harvey)
