Russian steelmaker Severstal has announced its operating and financial results for the first quarter of 2026, reporting lower revenue, EBITDA and net profit compared to the same period of last year, mainly due to weaker steel prices and a more challenging demand environment in the domestic market.
In the first quarter, Severstal’s steel product sales decreased by one percent year on year to 2.63 million mt. Revenue declined by 19 percent year on year to RUB 145.31 billion ($1.95 billion), while EBITDA fell by 54 percent to RUB 17.94 billion ($240.5 million), with the EBITDA margin dropping to 12 percent from 22 percent in the same quarter of 2025. According to the company, the decline in revenue was caused by lower average selling prices for metal products and by a higher share of semis in the sales mix.
On the production side, pig iron output fell by one percent year on year to 2.89 million mt, while crude steel production declined by four percent to 2.72 million mt. Total sales of metal products amounted to 2.63 million mt, down one percent year on year. Within this total, pig iron and slab sales increased by 80 percent to 330,000 mt, while sales of commercial steel rose by two percent to 1.11 million mt. Meanwhile, sales of high value-added products declined by 14 percent year on year to 1.18 million mt, mainly due to weaker demand for large-diameter pipes and renovation works affecting part of its coated rolled product capacity.
Severstal stated that the share of value-added solutions products in total sales fell by seven percentage points year on year to 45 percent, amid higher sales of semis and hot rolled products. In addition, iron ore sales to third parties increased by nine percent year on year to around 420,000 mt.
Commenting on the results, Alexander Shevelev, CEO of JSC Severstal Management, said demand for steel in Russia remained under pressure, noting that steel consumption in the country fell by 15 percent year on year in the first three months of 2026. He added that tight monetary policy had led to lower capacity utilization among key customers and falling prices, while the average price of hot rolled sheet in Russia decreased by seven percent year on year in the first quarter.
At the same time, Mr. Shevelev noted that prices in export markets posted some growth during the quarter, supported by lower export shipments from China following the introduction of a licensing system on January 1, 2026, higher freight costs linked to the conflict in the Middle East, and reduced competition from Chinese suppliers in some regions.
Despite the difficult market conditions, Severstal said it had kept its production capacity utilization close to 100 percent. However, the company also stated that, given weak steel demand in Russia and negative free cash flow in the first quarter, it had decided not to distribute dividends for the period in order to focus on completing key strategic projects and maintaining long-term financial stability.