No seasonal recovery in demand on Russian domestic market yet, it may start later than normal - Severstal

MOSCOW. April 22 (Interfax) - Severstal does not yet see the traditional spring revival in steel demand on the Russian domestic market, the head of the company's investor relations department Nikita Klimantov said.

"We are not observing any signs of demand recovery yet. Some market revival is possible with the start of the construction season, which traditionally occurs around this time - April-May. So far, as far as I know, this [the recovery] is not particularly noticeable. Let's see, perhaps the season will shift slightly. In general, some market revival can be expected, but I would not say it will be a drastic change," Klimantov said on RBC-TV.

Klimantov also drew attention to the level of the key interest rate. "The rate, I would say, is still prohibitive. If we take the real rate - that is, the key rate minus official inflation, which is around 5.8%-5.9%, I would still say that this rate is excessive," he said, recalling that for a market recovery to begin, "the rate must be at least around 12%."

"The issue is not even just the rate. Severstal itself is currently quite financially stable - we have low debt, we entered this crisis with good financial indicators. But the business environment is quite challenging. Everything that is good for our clients is good for us. And our clients need a consumption stimulus," he said.

The drop in metal consumption in Russia in Q1 is estimated by Severstal at 15% compared to the same period in 2025, the company said in its quarterly report published on Tuesday.

Last week, the World Steel Association (WSA) published a forecast according to which steel demand in Russia in 2026 will decrease 1% to 37.2 million tonnes, and a recovery of 1% to 37.6 million tonnes is possible in 2027.

According to WSA forecasts, global steel demand this year will increase 0.3% (to 1.724 billion tonnes), and by another 2.2% in 2027 to 1.762 billion tonnes. In 2025, the drop in demand, as reported, was 1.9% (to 1.718 billion tonnes).