In a statement by the White House, the US has imposed further sanctions against Russia to enhance enforcement and increase pressure on Russian president Vladimir Putin. Alexey Mordashov, the main shareholder and chairman of Russian steelmaker Severstal has been sanctioned among other Russian government officials and business leaders.
Almost immediately after the US sanctions were announced, Severstal was disconnected from American software, including the software needed to operate its production. According to Mordashov, Severstal has “two to three years” to arrange new software. Some market players said the impact has been partly diminished as earlier this year Severstal transferred part of its software to another platform, which is expected to be operable for another five to nine years.
In March this year, Alexey Mordashov was included in EU sanctions, causing Severstal to exit the EU markets and European buyers to replace the usual ex-Russia volumes with alternative sources such as Turkey and Asia, and also Ukraine, as SteelOrbis previously reported. Severstal was forced to reroute its steel exports, namely of HRC and slabs, to Asian markets, though the Middle East and Turkey remain in the producer’s focus.
Meanwhile, analysts project a double-digit decline in Russian GDP in 2022, with inflation in Russia expected to about 20 percent in 2022, while the war is projected to wipe out the last 15 years of economic gains in Russia.