Russia’s Largest Steelmaker Reports Fivefold Increase in Losses

Novolipetsk Steel (NLMK), Russia's largest steelmaker and one of the top 20 globally, reported a significant loss for the first quarter of 2026.

The facility reported a net deficit of 5.9 billion rubles ($64.1M), nearly five times higher than the 1.23 billion rubles recorded during the same period last year, according to The Moscow Times on April 30.

The plant, which dates back to the 1930s and has a production capacity of 17 million tons of liquid steel annually, saw its revenue drop by 10% to 145.57 billion rubles ($1.58B). Operating losses reached 6.1 billion rubles ($66.3M), marking a 3.2-fold increase compared to the first quarter of 2025.

Industry experts from Russian Alfa Bank noted that market conditions for metal producers are continuing to decline. Other major producers also reported sharp declines.

Severstal lost nearly all of its profit in the first quarter, while Magnitogorsk Iron and Steel Works (MMK) saw its steel production hit a 10-year low and reported a net loss of 14.9 billion rubles ($161.9M) for the previous year.

Kirill Chuiko, an analyst at BCS, stated, “The Russian steel industry is entering a difficult period, and this trend may continue for many years.” He added, “Without further state support, there is a risk of returning to the conditions of the early 2000s.”

Russia’s domestic demand for steel has fallen by 15% as the economy contracted for the first quarter in three years. Steel exports have also decreased by one-third, or 10 million tons, due to sanctions following Russia’s full-scale invasion of Ukraine.

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MMK CEO Pavel Shilyaev reported in March that “Production capacities of Russian metallurgists exceed market needs by twice.” He noted that the company is reducing capacity utilization to 60%, stopping investments and equipment repairs, and planning to cut 10% of its management staff.

The financial decline at NLMK reflects a broader systemic crisis across the industry, as other major producers like Severstal also reported a staggering collapse in their profits during the same period.

One of Russia’s most significant metallurgical enterprises, Severstal, reported a decline in its financial performance for the first quarter of 2026. The company’s net profit plummeted to 57 million rubles ($758,740), a staggering drop from the 21.07 billion rubles ($280.5 million) recorded during the same period the previous year.

Revenue for the steel giant fell by 18%, while earnings before interest, taxes, depreciation, and amortization decreased by 54%. Consequently, the company’s cash flow turned sharply negative, with outflows exceeding inflows by over 40 billion rubles ($532.5 million).

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