Russia’s construction materials market is in the grip of a deepening crisis. Cement production has retreated to 2020 pandemic-era levels, the country’s largest cement producer has suspended operations at multiple plants, and cheap imports from Belarus and Iran are capturing a growing share of a shrinking market. The downturn reflects a broader slowdown in Russian construction, driven by high interest rates, the withdrawal of subsidized mortgage programs, and a sharp decline in housing starts.
Cement Output Falls Back to 2020 Levels
According to Russia’s state statistics agency Rosstat, cement production between January and October 2025 totaled 50.41 million tonnes, broadly on par with 2020 volumes when output had slumped due to the COVID-19 crisis. Monthly production fell sharply in the autumn, with October 2025 output at 5.24 million tonnes, down 658,000 tonnes from September—an 11% month-on-month decline.
Industry body Soyuzcement estimates full-year 2025 production at 58.3 million tonnes, a year-on-year decline of approximately 10.4% compared with 65.1 million tonnes in 2024. Final data for January-December 2025 shows production fell 9.8% to 58.6 million tonnes, while consumption declined 9.0% to 60.7 million tonnes.
The contraction is directly linked to the collapse in housing construction. Deputy Prime Minister Marat Khusnullin has warned that housing construction in Russia could decline by 30% by 2027. The Ministry of Construction now estimates that total housing completions in 2026 may reach only 87.75 million square meters, an 18.8% decline from 2025, with multi-apartment buildings falling 11% and individual housing construction dropping 24.2%.
Market Leader Suspends Operations
Cemros, Russia’s largest cement producer (formerly Eurocement), has been forced to halt production at several facilities. The company suspended operations at its Belgorod and Ulyanovsk plants in mid-2025 and reduced activity at its Lipetsk facility, where only grinding, packing, and laboratory operations continue.
The company placed 13,000 employees across 18 cement plants on a four-day working week starting October 1, 2025, in an effort to avoid full plant shutdowns. Cemros has explicitly blamed rising imports for the closures. Denis Usoltsev, director of marketing and strategic analysis at Cemros, said that “imports, often priced aggressively, are displacing domestic producers, particularly in central Russia, border regions and the south”.
The company has called on the Russian government to impose short-term limits on cement imports, proposing a cap of no more than 1.5 million tonnes per year to maintain production capacity amid the demand downturn.
Import Pressure Intensifies
Despite surplus domestic capacity, Russia imports approximately 4 million tonnes of cement annually, primarily from Belarus and Iran. By November 2025, imports had reached 3.6 million tonnes, and Soyuzcement expected full-year imports to rise to at least 3.7 million tonnes.
Belarus dominates imports, accounting for approximately 69% of the total, while Iran represents around 20% and Kazakhstan about 9%. Imports now account for roughly 6% of domestic cement consumption, a share that has doubled over two years.
Analysts at SMPRO forecast that the share of Belarusian cement in the Central and Northwestern federal districts could reach 35% by 2027, a 3.5-fold increase from 2024 levels.
Structural Overcapacity
Russia’s cement industry suffers from chronic overcapacity. The total design production capacity of Russian cement plants is estimated at approximately 104 million tonnes per year, while consumption in 2024-25 stood at roughly 60-67 million tonnes. This means the industry is operating at close to 50% utilization, with idle capacity exceeding 50 million tonnes annually.
This marks a further deterioration from the ten-year average utilization rate of around 60%. Overcapacity is reported in all but one federal district—only the North Caucasus Federal District sees consumption exceed available capacity.
Prices Show Deflationary Pressures
Despite the broader inflationary environment in Russia, construction materials prices have remained subdued. According to Rosstat data for April 2026, the consolidated price index for investment goods stood at 99.7% compared with March 2026, indicating deflation. The index for producer prices on construction products was 100.2% month-on-month.
Among individual material groups, ceramic construction bricks saw prices fall to 92.8% in April 2026 compared with March, while ready-mix concrete declined to 97.1% and steel reinforcement dropped to 94.0%. Portland cement prices remained essentially flat at 99.8%.
Industry experts confirm this trend. Elena Azarova, director of the B2B department at construction trading house Petrovich, noted that “for heavy materials in many groups we are actually seeing deflation. The cost of construction materials is not the catastrophe that the industry needs to think about first”. She estimated average price growth at around 5%, with some product categories showing outright declines.
Paint and Coatings: Raw Material Dependencies
The paint and coatings segment, while more resilient than other construction materials categories, faces its own structural challenges. According to SIBUR data, the overall construction industry showed an average tonnage decline of approximately 11% year-on-year, but the paint segment declined only a few percent.
However, the sector remains heavily dependent on imported raw materials. Denis Gerber, head of marketing for SIBUR’s Construction division, presented data showing that while finished product localization is high, dependence on imported raw materials stands at 44%. The dependence is highly uneven: water dispersions have only 17% import share, alkyd resins 25%, but acrylic resins reach 82%, saturated polyester resins 89%, and polyurethane and epoxy resins are almost entirely dependent on foreign supplies.
Andrey Chernikov, representing Alknex Belgorod, a producer of alkyd and acrylic resins, confirmed that “more than 50% of raw materials for resin production we import. Two main problems are the absence of local production of specific components and the non-compliance of available domestic raw materials with our quality requirements”.
Innovation and Localization Efforts
Despite the downturn, some companies are investing in domestic production and technological solutions. SIBUR is expanding its styrene chain in Tatarstan by approximately 100,000 tonnes per year, which will improve availability of base monomer for styrene-acrylic dispersions used in paints and coatings.
Polyplast-Uralsib is building Russia’s first large-scale epoxy resin production facility, with pilot installations already launched for liquid dispersive resins (2024) and solid dispersive resins (first half of 2026).
In the formwork segment, SIBUR and UTECH signed a memorandum of cooperation in June 2026 to develop removable formwork using polymer sheets. UTECH plans to localize production in Russia under its own brand, with SIBUR supplying specialized polymer grades and technical expertise. In 2026, UTECH plans to sell approximately 18,000 square meters of polymer sheets for formwork systems.
Government Support Measures
The Russian government is considering measures to support domestic producers. A proposal under discussion would grant preferences in state procurement for granite, glass, and ceramic products from Russia and EAEU countries, following an 8.3% decline in construction materials output in 2025 and a potential further 22% decline in 2026.
SIBUR’s Construction division director Alexey Sboev noted that “the construction industry is interested in solutions that simultaneously optimize costs and improve construction quality. It is especially important to combine the competencies of materials producers and technology partners”.
Outlook: Crisis Deepens
Industry analysts expect the situation to deteriorate further in 2026-27. Yevgeny Vysotsky, executive director of CM Pro, forecasts that cement production will drop 21% over the next three years, from 66.5 million tonnes in 2024 to 52.8 million tonnes in 2027.
The construction market as a whole is projected to contract 1.7% in 2026 and a further 0.4% in 2027, according to analyst forecasts cited by Petrovich’s Azarova. She noted that “if these figures are confirmed, this will be an unprecedented story: for approximately 10 years we observed stable growth”.
Project timelines have already lengthened significantly. Azarova observed that “if previously two years was considered a normal timeframe, now three and a half years is already a good result. For the same square meters and the same volume of materials, deliveries are now stretched over a longer period”.
The key uncertainty is whether infrastructure and industrial construction can offset the decline in residential development. According to T-Bank analytics, federal infrastructure spending is planned at 5.6 trillion rubles for 2026-2028, with a 9% increase planned for 2026 and 19% annual growth in 2027-2028, reaching 2.2 trillion rubles per year by the end of the planning period. In 2025, 72 large industrial facilities were opened across Russia, compared with 52 in 2024—each consuming construction materials.
However, whether these investments will be sufficient to absorb the idle capacity in the cement and building materials sector remains uncertain. With the industry operating at half capacity and imports continuing to flow in at competitive prices, Russian producers face a prolonged period of adjustment that may involve further plant closures, capacity mothballing, and consolidation.
