Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Russian steelmaker and iron ore miner Severstal plans to invest $1.35bn in 2021 to upgrade its steelmaking facilities and increase the output from its Karelsky Okatysh iron ore project.


The company indicated on Feb 4 that of the total outlay, $785mn would be invested towards the upgrades of the coke oven battery No. 11 that began at the end of 2020 and bringing its blast furnace No 3 to design capacity. The steelmaker will also invest part of the amount earmarked for its steel business in upgrading its long-range mill and heating furnaces. The amount also includes $453mn towards maintenance projects.


The upgrade of the coke oven battery and increasing the design capacity of the blast furnace will reduce the company’s cost of steel production this year while creating additional value for shareholders, according to Severstal’s chief finance officer, Alexey Kulichenko.


In 2021, Severstal plans to invest $524mn in its Resource division. Of this amount, it will spend $267mn towards projects to increase production at its Karelsky Okatysh iron ore project to 5mn mt by 2023.


In 2020, Severstal’s consolidated revenue fell 15.8pc to $6.8bn from $8.1bn in the previous year, the company said in its earnings report on Feb 4, citing weaker prices and demand in the first half of 2020 due to the COVID-19 pandemic. The group’s EBITDA during this period fell by 13.7pc to $2.4bn from $2.8bn, though its EBITDA margin increased to 35.3pc from 34.4pc on an annual basis.

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