By the decree of October 29, the deadline for paying the excise tax on steel and the mineral extraction tax on iron ore was postponed until December 1, 2025, which, we quote, "will allow metallurgical enterprises to free up working capital for additional support of their activities and investment activity."
In fact, the short resolution not only does not solve the problems of the industry, but also, in the best traditions of departmental efficiency, was adopted late (the deadline for payment of the relevant payments expired on Tuesday).
And the industry's enterprises have more and more problems. Despite the fact that only two of the big five have reported in nine months, MMK and Severstal, a number of disappointing conclusions can be drawn based on their performance.
For example, Severstal is experiencing a deterioration in almost all key metrics: despite the increase in production volumes, revenue fell by 13.5%, EBITDA decreased by 40.4%. EBITDA margin decreased from 30% to 21%. Net profit has more than halved. Free cash flow turned negative, despite positive values a year earlier. Cash reserves decreased by 44%. At the same time, the company manages to maintain and even increase the volume of capital investments, which increased by 77% during the reporting period.
MMK has a similar situation. Revenue for the first nine months of 2025, despite an increase in both steel production and sales, decreased by 7.4%, EBITDA by 12.6%, and net profit by 16.8%. At the same time, while Severstal is still managing to maintain a low debt burden (Net debt/EBITDA is close to zero), MMK's net debt has more than doubled in nine months, from 21 to 46 billion rubles.
Two important negative trends common to both companies are striking:
The first is a deterioration in the sales structure, an increase in the share of semi—finished products and, consequently, a decrease in the share of high—value-added products;
The second is for the first time in a long time for both MMK and Severstal has generated a negative cash flow.
There are several reasons, including the decrease in prices in all groups of rolled metal products, which has been recorded since mid-2024.
The situation is aggravated by falling demand in the domestic market. According to the Russian Steel Association, metal consumption in the Russian Federation will fall by 14% to 37.8 million tons by the end of 2025. With the closure of foreign markets and increased competition from Asian suppliers, and with no prerequisites for improving the situation in the domestic market, the only option for companies to balance cash flows is to postpone or reduce investment programs altogether.
This could have been avoided if the government had agreed with the metallurgists' proposal to at least postpone the payment of a number of taxes and insurance
