Russian steelmaker Severstal may reduce its 2027 investment program by a further 24 percent to approximately RUB 85 billion ($1.1 billion) as a result of declining steel demand, according to Russian media reports.
The planned reduction is intended to help the company maintain positive free cash flow. The company noted that the 2027 investment forecast is preliminary and will remain under review until the end of 2026.
Weak demand continues to pressure Russian steel industry
Russian steel producers continue to face pressure from Western sanctions, high interest rates and weak domestic steel demand. Russian steel demand has declined by around 30 percent compared to 2023 levels.
Demand from key steel-consuming sectors, including construction, energy, automotive and machinery, has weakened as companies postpone investment projects due to high borrowing costs introduced to curb inflation. Steel consumption in Russia fell by approximately 14 percent in 2025, and Severstal expects demand to decline by a further 7-9 percent in 2026.
Company has already reduced 2026 investment program
In March, Severstal announced cost-cutting measures in response to deteriorating market conditions, reducing its 2026 investment program by 24 percent to RUB 112 billion from the previously planned RUB 147 billion, while stating that it would continue implementing its major strategic projects.
In June, Severstal’s majority owner Alexei Mordashov said the company would continue reducing investment after its cash flow turned negative.