Russian steelmaker Severstal may cut its 2027 investment program by another 24 percent, to about 85 billion rubles ($1.1 billion), as a result of weaker demand for steel, according to Russian media reports.
The planned cuts are intended to help the company maintain positive free cash flow. The company noted that the investment forecast for 2027 is preliminary and will be under consideration until the end of 2026.
Weak demand continues to put pressure on Russian metallurgy
Russian steel producers continue to experience pressure from Western sanctions, high interest rates and weak domestic demand for steel. Demand for steel in Russia is down about 30 percent from 2023 levels.
Demand from key steel-consuming sectors, including construction, energy, automotive and engineering, has weakened as companies delay investment projects due to high borrowing costs imposed to curb inflation. Steel consumption in Russia fell by about 14 percent in 2025, and Severstal expects demand to fall by another 7-9 percent in 2026.
The company has already reduced its investment program for 2026
In March, Severstal announced measures to reduce costs in response to deteriorating market conditions, reducing the investment program for 2026 by 24 percent to 112 rubles. of the previously planned 147 billion rubles, while stating that it will continue to implement its major strategic projects.
In June, the majority owner of Severstal Alexey Mordashov said that the company would continue to reduce investments after its cash flow became negative.
