The Crisis in the Steel Market Hitting russia’s Industry

Weak demand for steel and falling prices are cutting into the russian steel industry’s profits. In January–September 2026, PJSC “severstal”’s net profit fell by 61% compared to the same period last year – to $232.5 million.

In the third quarter, the company’s revenue fell by 3% – to $2.1 billion, while sales of steel products declined by 9% – to 2.61 million tons. From January through September, average steel prices in russia fell by 6%. Demand did not recover after dropping by approximately 14% in 2025. The company also expects a seasonal slowdown in demand in the fourth quarter.

“severstal” is cutting back on investments and is not paying dividends. Over the first nine months, capital expenditures decreased by 39% – to $930 million, and in the third quarter, they fell by 42% – to $280 million. The company suspended dividend payments for the first nine months due to negative free cash flow. Dividends have not been paid since the fourth quarter of 2024. According to the company’s forecast, free cash flow will remain negative through 2026.

The situation at “severstal” illustrates how weak domestic demand and falling prices are hurting russia’s industry. Even large manufacturers are having to cut back on investments and conserve funds rather than expand production.