Severstal PAO: Navigating Challenges and Achievements in 2025
In a year marked by both challenges and strategic advancements, Severstal PAO, a leading steel and mining company, has demonstrated resilience and forward-thinking in its operations. Listed on the Moscow Stock Exchange, Severstal operates across three main divisions: resources, Russian steel, and international business operations. Despite facing a volatile market, the company has made significant strides, particularly in sustainability and production efficiency.
Sustainability Milestone Achieved
In a notable achievement, Severstal announced on July 21, 2025, that it has reached its target of reducing CO2 emissions by 10% two years ahead of schedule. This accomplishment is part of a broader commitment to environmental sustainability, with total investments in greenhouse gas emission cuts by 2028 increasing almost twofold to 298 billion rubles ($3.8 billion). This proactive approach not only underscores Severstal’s dedication to sustainable practices but also positions the company as a leader in the metals and mining sector’s transition towards greener operations.
Production Gains Amidst Market Sensitivity
Despite the broader economic challenges, Severstal has reported a significant increase in steel and pig iron output in the first half of 2025. In the second quarter alone, steel output rose by 8% year-on-year to 2.5 million metric tons, while pig iron production surged by 35% to 2.7 million metric tons. These gains were facilitated by the renovation of blast furnace number 5 in the previous year, showcasing Severstal’s commitment to enhancing its production capabilities.
Navigating Economic Challenges
However, the journey has not been without its hurdles. Severstal faced a decrease in both turnover and profit in the second quarter of 2025, with turnover dropping by 16% to 185,477 million rubles. This downturn was attributed to lower average prices and a shift in product mix. The EBITDA result also saw a 36% decrease to 39.3 million rubles. In response to these challenges, Severstal has decided against distributing dividends for the second quarter. CEO Alexander Shevelev highlighted the quarter as particularly challenging for the steel industry and the Russian economy at large, citing high interest rates as a dampener on steel demand.
Market Sensitivity and Strategic Outlook
Adding to the economic challenges, Severstal’s CEO, Alexander Shevelev, pointed out the increased sensitivity of the Russian steel market to rising imports. The issue extends beyond lower pricing to include the risks of underconsumption within the domestic market. This situation calls for strategic navigation to maintain competitiveness and market share.
Conclusion
As Severstal PAO navigates through these turbulent times, its achievements in sustainability and production efficiency stand out as beacons of progress. The company’s strategic responses to economic challenges and market sensitivity will be crucial in maintaining its position as a leader in the metals and mining sector. With a keen eye on both immediate challenges and long-term sustainability goals, Severstal is poised to continue its trajectory of growth and innovation in the years to come.