Russian steelmaker Severstal needs to reorient the direction of supplies in the face of sanctions against Russia and therefore cannot guarantee it will maintain production volumes, says majority owner Alexei Mordashov.
“There are serious challenges for us related to the need to reorient supply lines and procurement channels in the context of sanctions. We cannot confidently say that we are maintaining production volumes,” Mordashov said at the All-Russian Ecological Forum “Ecosystem”. “Despite the difficult access to certain technologies due to the sanctions regime under which Severstal has fallen, we expect to achieve all our goals, including through import substitution.”
Severstal, the largest supplier of Russian flat products to Europe, announced on 2 March that it had stopped deliveries of steel products to the EU after the bloc imposed sanctions on Mordashov, in connection with Russia’s invasion of Ukraine (see Kallanish passim).
The company announced it intends to restore sales of products abroad, refocusing shipments on Asian, South African and South American countries by July. In particular, these will include exports to Iraq, Jordan, Vietnam, China, and India.
Severstal also intends to increase the volume of rolled metal supplied to North Africa, India and Southeast Asian countries, said company chief executive Alexander Shevelev.
“We are already supplying rolled metal products there; in the near future we will increase the volume of rolled metal supplied to these countries,” he noted. “In addition, we are actively looking at the Chinese market, at Korean manufacturers.”
Severstal will revise the forecast for capital expenditures for 2022, since investment projects related to imported equipment will be postponed, Shevelev admitted. “The forecast for capital expenditures will be revised automatically, because most of the investment programme depends on imported equipment,” he observed.
The firm is not publishing its financial performance for the first quarter.
Svetoslav Abrossimov Bulgaria