Latest news with #AlexanderShevelev
Yahoo
21-07-2025
- Business
- Yahoo
Russia's Severstal blames high rates and low prices for 55% Q2 profit plunge
MOSCOW (Reuters) -Severstal, one of Russia's top steelmakers, blamed the high key interest rate for a 15% drop in demand for metals in the first half of 2025, which, along with low prices, resulted in a 55% fall in the company's net profit in the second quarter. Last year, the central bank hiked its key interest rate to 21%, the highest level since the early 2000s, as it fights inflation. The regulator started cutting rates last month and is expected to cut further at a rate-setting meeting this week. The central bank's tight monetary policy led to a sharp economic slowdown in Russia, with the construction industry—one of the main consumers of steel—hit particularly hard. "The second quarter of 2025 was extremely challenging for both the metals industry and the entire Russian economy," said Severstal's CEO Alexander Shevelev. The company said it will not pay dividends in order to maintain financial stability. "The high key interest rate is restraining demand for metal products, which decreased by 15% year-on-year in the first half of the year due to reduced consumption in the construction, engineering, and energy sectors," Shevelev added. Shevelev stressed that the strong rouble, which rallied by 45% against the U.S. dollar this year, was restricting its access to export markets. Shevelev earlier said that some steel factories in Russia could close down to balance the market. The company welcomed the expected interest rate cut at the meeting on July 25, stressing in its financial results' presentation that the cut will have a positive impact on the demand for steel. Net profit in the second quarter fell to 15.7 billion roubles ($200.3 million), down 55% year-over-year. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
21-07-2025
- Business
- Reuters
Russia's Severstal blames high rates and low prices for 55% Q2 profit plunge
MOSCOW, July 21 (Reuters) - Severstal, one of Russia's top steelmakers, blamed the high key interest rate for a 15% drop in demand for metals in the first half of 2025, which, along with low prices, resulted in a 55% fall in the company's net profit in the second quarter. Last year, the central bank hiked its key interest rate to 21%, the highest level since the early 2000s, as it fights inflation. The regulator started cutting rates last month and is expected to cut further at a rate-setting meeting this week. The central bank's tight monetary policy led to a sharp economic slowdown in Russia, with the construction industry—one of the main consumers of steel—hit particularly hard. "The second quarter of 2025 was extremely challenging for both the metals industry and the entire Russian economy," said Severstal's CEO Alexander Shevelev. The company said it will not pay dividends in order to maintain financial stability. "The high key interest rate is restraining demand for metal products, which decreased by 15% year-on-year in the first half of the year due to reduced consumption in the construction, engineering, and energy sectors," Shevelev added. Shevelev stressed that the strong rouble, which rallied by 45% against the U.S. dollar this year, was restricting its access to export markets. Shevelev earlier said that some steel factories in Russia could close down to balance the market. The company welcomed the expected interest rate cut at the meeting on July 25, stressing in its financial results' presentation that the cut will have a positive impact on the demand for steel. Net profit in the second quarter fell to 15.7 billion roubles ($200.3 million), down 55% year-over-year.
Yahoo
19-06-2025
- Business
- Yahoo
Russia's Steel Industry on the Brink? Severstal Warns of Potential Shutdowns
Steel demand in Russia is heading into rough terrainand Severstal (SVJTY) is waving a red flag. CEO Alexander Shevelev told Rossiya-24 that some production lines may need to shut down to balance oversupply as domestic consumption could drop 10% this year, down to 39 million tons. That's a steep declinecomparable to the full-year appetite of some entire industries. With steel prices sitting at multi-year lows and the strong ruble choking exports, many producers are now walking a fine line between breakeven and red ink. This isn't just a sector storyit's a window into the wider slowdown rippling through Russia's economy. Last year's rate hikes to tame inflation are still casting a long shadow. The Economy Ministry is now warning of recession risks, and exporters are getting squeezed by a ruble that's surged nearly 23% since 2023. At a current rate of 78.72 per dollar, the ruble is far from the 90100 range Shevelev believes would better support trade. That FX pressure is compounding pain for commodity sellers across oil, steel, and beyond. Despite the storm clouds, Severstal isn't pulling the plug just yet. Shevelev said the company aims to keep both production and investment plans on trackthough he didn't rule out deeper cuts if things worsen. Any shift in monetary policy could offer some breathing room, but for now, investors should stay alert. Russia's steelmakers may be entering a new phase of survival modewhere efficiency, cost control, and macro resilience will separate the winners from the rest. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-06-2025
- Business
- Yahoo
Russia's Steel Industry on the Brink? Severstal Warns of Potential Shutdowns
Steel demand in Russia is heading into rough terrainand Severstal (SVJTY) is waving a red flag. CEO Alexander Shevelev told Rossiya-24 that some production lines may need to shut down to balance oversupply as domestic consumption could drop 10% this year, down to 39 million tons. That's a steep declinecomparable to the full-year appetite of some entire industries. With steel prices sitting at multi-year lows and the strong ruble choking exports, many producers are now walking a fine line between breakeven and red ink. This isn't just a sector storyit's a window into the wider slowdown rippling through Russia's economy. Last year's rate hikes to tame inflation are still casting a long shadow. The Economy Ministry is now warning of recession risks, and exporters are getting squeezed by a ruble that's surged nearly 23% since 2023. At a current rate of 78.72 per dollar, the ruble is far from the 90100 range Shevelev believes would better support trade. That FX pressure is compounding pain for commodity sellers across oil, steel, and beyond. Despite the storm clouds, Severstal isn't pulling the plug just yet. Shevelev said the company aims to keep both production and investment plans on trackthough he didn't rule out deeper cuts if things worsen. Any shift in monetary policy could offer some breathing room, but for now, investors should stay alert. Russia's steelmakers may be entering a new phase of survival modewhere efficiency, cost control, and macro resilience will separate the winners from the rest. This article first appeared on GuruFocus.
Yahoo
19-06-2025
- Business
- Yahoo
Russia's Steel Industry on the Brink? Severstal Warns of Potential Shutdowns
Steel demand in Russia is heading into rough terrainand Severstal (SVJTY) is waving a red flag. CEO Alexander Shevelev told Rossiya-24 that some production lines may need to shut down to balance oversupply as domestic consumption could drop 10% this year, down to 39 million tons. That's a steep declinecomparable to the full-year appetite of some entire industries. With steel prices sitting at multi-year lows and the strong ruble choking exports, many producers are now walking a fine line between breakeven and red ink. This isn't just a sector storyit's a window into the wider slowdown rippling through Russia's economy. Last year's rate hikes to tame inflation are still casting a long shadow. The Economy Ministry is now warning of recession risks, and exporters are getting squeezed by a ruble that's surged nearly 23% since 2023. At a current rate of 78.72 per dollar, the ruble is far from the 90100 range Shevelev believes would better support trade. That FX pressure is compounding pain for commodity sellers across oil, steel, and beyond. Despite the storm clouds, Severstal isn't pulling the plug just yet. Shevelev said the company aims to keep both production and investment plans on trackthough he didn't rule out deeper cuts if things worsen. Any shift in monetary policy could offer some breathing room, but for now, investors should stay alert. Russia's steelmakers may be entering a new phase of survival modewhere efficiency, cost control, and macro resilience will separate the winners from the rest. This article first appeared on GuruFocus. Sign in to access your portfolio
