RUSSIA’S SEVERSTAL TO STOP SUPPLYING STEEL TO EU AFTER SANCTIONS

The Russian steel group Severstal, led by tycoon Alexei Mordashov, has announced that it will no longer sell steel to the European Union (EU) following sanctions imposed on Russia’s second richest man and the company’s main owner.

Severstal, the largest steelmaker, sold around 3 million tons of steel annually to the EU, its main export market. According to EUROFER, the European Steel Association, buyers will now try to find alternative sources of supply, such as local production. The measure will also directly affect intermediary companies.

Specifically, the terms of the sanctions prohibit the EU from doing business with the sanctioned parties and legal entities under their control. Mordashov has legal control over Severstal through its 77% majority shareholding in the mining and steel company.

In 2020-2021, Severstal made investments and entered into agreements with Western technology companies, including Ekona Power, a Canadian developer of low-carbon hydrogen production technology; U.S. developer of steel alloy diffusion technology Arcanum Alloys; Dutch composite materials engineering company Airborne; and Hyperloop Transportation Technologies, a Los Angeles-based developer of a high-speed transportation system.

The steel group also supplies steel to wind farm projects developed in Russia with the participation of Western renewable energy companies and has a stake in Linde Severstal, a joint venture with German engineering and industrial gases company Linde, which produces coiled heat exchangers for natural gas liquefaction plants.