Novolipetsk Steel PJSC: Financial Stress Amid Industry‑Wide Downturn

Novolipetsk Steel PJSC (NLS), a vertically integrated steel producer listed on the Moscow Stock Exchange, is confronting a challenging operating environment as the broader Russian metallurgy sector experiences declining demand and falling commodity prices. The company’s share price closed at 108.74 RUB on 24 January 2026, well below its 52‑week high of 165.16 RUB and nearer its 52‑week low of 94.58 RUB, reflecting investor concerns about the company’s outlook.

Industry Context

A recent report from the Center for Strategic Research titled “How Steel Cooled” highlights a shift toward a survival mode for metallurgical firms. The report warns that tightening monetary conditions, reduced domestic demand, and lower steel prices are eroding the financial performance of most Russian steel producers. If the current trajectory persists, high debt burdens could trigger a wave of restructurings to avert bankruptcies. While the report lists Severstal, NLMK, and MMK as the only major firms able to withstand the pressure, it notes that even these companies have reported significant declines in revenue and profitability.

Peer Performance

  • Severstal reported a 14 % drop in revenue, a 42 % decline in EBITDA, and a net loss of 17.7 billion RUB in Q4 2025, driven largely by asset impairments. The company’s free cash flow turned negative at 30.5 billion RUB, with 8.6 billion RUB recorded in Q4 alone.
  • NLMK and MMK also experienced steep revenue reductions (23 % and 23 %, respectively) and substantial declines in EBITDA and net profit, with MMK’s free cash flow negative at 2.6 billion RUB for the first nine months.

These results underscore the sector’s vulnerability and suggest that NLS, though not yet publicly reporting full‑year figures, may face similar pressures.

Capital Structure and Market Position

Novolipetsk Steel’s market capitalization stands at 827 billion RUB. The company produces a broad spectrum of flat and long steel products used in construction, machine‑building, power generation, and offshore windmill manufacturing. Its integrated model gives it a competitive edge, but the current market conditions strain all major players, including NLS.

Wealth of Russian Steel Owners

The wealth of Russia’s richest entrepreneurs has risen by 19.392 billion USD in early 2026, according to RIA Novosti calculations based on Bloomberg Billionaires Index data. Vladimir Potanin, a principal shareholder of NLMK, saw his fortune increase by 3.46 billion USD to 29.9 billion USD. Alexey Mordashov, a major stakeholder in Severstal, increased his holdings by 1.28 billion USD to 27.5 billion USD. While these figures highlight the personal fortunes of key industry players, they do not directly reflect the operational performance of their respective companies.

Outlook

Given the prevailing trend of declining domestic demand and falling steel prices, Novolipetsk Steel’s financial stability may be challenged. The company’s ability to maintain profitability will depend on its capacity to manage costs, optimize production, and secure stable market access. Investors should monitor forthcoming earnings releases and any strategic initiatives aimed at mitigating the impact of the industry downturn.