THE LEADER OF THE RUSSIAN FERROUS METALLURGY IS HEADING FOR BANKRUPTCY

Evraz Holding found itself in a disadvantageous situation due to securities. A company whose shares were traded on the London Stock Exchange may not be able to cope with bond payments. The reason for the unrest was the sanctions imposed on metallurgical production by the UK.

The head of Evraz, Alexey Ivanov, believes that the main reason for the company's financial problems was a decrease in demand for products, increased competition and a strengthened ruble.

He said this in the company's press release, published on the results of work in the first half of the year. During this period, the net profit of the holding decreased 202 times, amounting to only $6 million. At the same time, the debt burden is $4 billion, having decreased by $136 million.

According to experts, the vulnerability of the company in the circumstances arose due to the company's strong dependence on EU countries. Most of the products (61%) were exported, the remaining part was consumed in the domestic market, where there was a sharp decline in the field of mechanical engineering.

Now the company is trying to reorient its activities to other foreign markets.

It will not be easy to do this, given the many new industries that are ready to produce rolled steel on more favorable terms. Even agreeing to conclude trade contracts, foreign buyers will demand significant discounts. Such a strategy will not bring much profit.

Within Russia, the company traditionally focuses on the production of long products. Considering that the pace of industrial construction has greatly decreased in recent years, almost the only buyer of steel is the sphere of road and housing construction. This explains the drop in retail prices for products that have always increased in price (rebar, beam, channel).