In Russia it becomes more profitable to sell rolled metal on domestic market, than to export it

In the first quarter, Severstal of Alexei Mordashov made a record EBITDA margin since 2006 - 38.5%. The company explains it as by a reduction in costs, as well as by the depreciation of the ruble. But despite the devaluation, the domestic market is already more profitable than exports: according to analysts, an anomalous premium to export parity formed in Russia. In the first quarter, we should expect high profitability of the other steelmakers too.

In the first quarter of 2015, Severstal of Alexei Mordashov (who owns 79.2% of shares) increased its EBITDA margin to 38.5% from 32.1% in the fourth quarter of 2014. This is the record figure since the IPO on the London Stock Exchange in 2006, the company reports; among the reasons for the increase of the profitability are lower commodity prices and the devaluation of the ruble. The prime cost of ton of Severstal’s slab decreased by 17% to $169 in the first quarter. Due to the falling steel prices, the company's proceeds in the first quarter decreased by 18.5% as compared with the previous quarter to $1.53 billion, but EBITDA decreased by only 2%, to $590 million. Severstal made the net profit in the amount of $343 million against the loss in the amount of $795 million in October - December 2014.