Russia’s silicon industry is entering a period of severe contraction after Rusal, one of the country’s leading metals producers, announced the shutdown of its Kremniy silicon plant in the Irkutsk region. The closure represents one of the most significant industrial pullbacks in Russia’s recent economic landscape, highlighting the growing impact of global market pressures, weakening demand, and intensifying competition from low-cost foreign suppliers.
Rusal said the decision stems from a sharp decline in both domestic and international demand for Russian silicon. Imported silicon—especially from rapidly expanding foreign producers—has become substantially cheaper, leaving Russian-made material increasingly uncompetitive. The company acknowledged that its silicon output is losing ground in global markets, where securing buyers has become increasingly difficult despite stable production capacity.
Local authorities have been formally notified of the shutdown plans, and Rusal expects coordinated measures to help cushion the “social consequences” for workers and the wider community. Meanwhile, the company’s second silicon facility, Silicon Ural, will continue operating at reduced capacity as pricing pressure and supply chain challenges intensify.
Rusal has also revised its future production outlook, announcing that its silicon output will drop to 35,000 tons next year—a steep reduction from this year’s 53,400-ton total. The Kremniy plant, with its annual capacity of 34,000 tons, and Silicon Ural, with 27,000 tons, are Russia’s only producers of refined silicon, a material essential for metallurgical applications, electronics manufacturing, and the fast-growing tech and clean-energy sectors.
With domestic demand of roughly 45,000 tons, both plants have historically relied on export markets to maintain full-scale operations. However, the rapid expansion of cheaper foreign suppliers has pushed Russian producers to scale back aggressively, exposing vulnerabilities in the country’s industrial and export structure.
This retrenchment mirrors a broader trend across Russia’s industrial sector. Companies involved in mining, transport, machinery, and metals production are increasingly cutting working hours, reducing output, or preparing for layoffs as economic pressure mounts.
VSMPO-Avisma—the world’s largest titanium producer—has shifted employees to reduced-hour schedules, affecting mainly administrative staff. The company described the measure as “difficult” but necessary to sustain operational stability in an uncertain market environment.
Similar restructuring is unfolding across the metals industry. The Ashinsky Metallurgical Plant plans to mothball its stainless-steel shop and cut more than 300 jobs. Other industrial giants—including Cemros, diamond miner Alrosa, Russian Railways (RZhD), and automakers GAZ, KamAZ, and AvtoVAZ—have adopted cost-saving measures ranging from reduced workweeks to scaled-back production.
Downstream producers are also feeling the economic strain. The Chelyabinsk Electrometallurgical Plant (ChEMK) and the Traktor Plant have shifted to four-day workweeks, while Sveza’s plywood factory in Tyumen has shut down entirely after a sharp collapse in demand.
Rusal’s decision reflects a wider structural challenge facing Russian industry. As global competition intensifies, domestic consumption slows, and supply chains continue to shift—particularly in Europe and Asia—the future of Russia’s silicon production and broader metals sector will depend on its capacity to adapt to a far more competitive and volatile global market.
