Metallurgical giant Severstal stopped deliveries to the EU countries following the sanctions against its main shareholder Alexei Mordashov.
To whom is the pandemic, and to whom are superprofits
In the Forbes rating last year, the name of Alexei Mordashov is in the very first place. His fortune is estimated at $ 29.1 billion, this is an absolute record for 18 years among all champions on the Forbes podium. Alexei Mordashov was second in the list of Russian oligarchs in 2008, 2011, 2017 and 2018, and now, finally, he headed it. What allowed the businessman to get ahead in difficult covid times? Paradoxically, it was the pandemic that played not the last, but rather the main role in this. Our version told how the production of metals and coal decreased due to the pandemic in the world. On the other hand, production at Russian enterprises did not stop, moreover, as it turned out, after the accident at the Listvyazhnaya mine, the miners were set more and more ambitious plans. The domestic metallurgical giant Severstal, controlled by Alexei Mordashov, began to receive super profits from the sale of its products on the world market.
Severstal
The Soviet and now Russian steel and mining company Severstal has been chastising its history since 1955. It was then that the first rolled steel was produced in Cherepovets. In the mid-1990s, Alexei Mordashov, having organized the privatization of the company, left Yury Lipukhin, general director of the Cherepovets plant, out of work. To this day, Severstal is associated primarily with the name of Alexei Mordashov, who owns more than 77% of the company’s shares, which currently employs about 50,000 people.
Sanctions
From the point of view of the West, Alexei Mordashov is not the last man in the Kremlin. Therefore, his name was included in the sanctions list, which the EU formed in connection with the Russian special operation in Ukraine. Officially, sanctions against Mordashov were introduced for the fact that his company is a shareholder of the Rossiya bank operating in Crimea and the National Media Group.
“Severgroup also owns PJSC Power Machines, which is responsible for the sale of four wind turbines to the annexed Crimea,” the sanctions document says, according to which blacklisted individuals are prohibited from entering EU countries, they also freezing all assets in the EU.
Response
Alexey Mordashov first spoke about the sanctions imposed against him in an exculpatory tone: “I am far from politics and all my life I created economic value for the companies in which I worked in Russia and abroad. I have absolutely nothing to do with the emergence of the current geopolitical tensions. I don’t understand why sanctions have been imposed on me. For a long time I have been involved in the development of economic, cultural and humanitarian cooperation with European countries. I do not understand how the sanctions against me will contribute to the settlement of the conflict in Ukraine. What is happening now is a tragedy of two fraternal peoples. It is terrible that Ukrainians and Russians are dying, people are suffering hardships, the economy is collapsing. We must do everything necessary to find a way out of this conflict in the very near future and stop the bloodshed in order to help the affected people restore normal life.”
As you know, even if you are out of politics, politics can always come to you, or for you. However, Mordashov did not remain out of politics. On the eve it became known that Severstal stopped deliveries to the European Union in response to sanctions against Mordashev. “We officially confirm that we have stopped deliveries to the EU due to the sanctions imposed on the shareholder. We are redirecting commodity flows to alternative world markets,” a company representative said.
According to Severstal, on average, annual deliveries to Europe amount to about 2.5 million tons (this is 21.5% of the total output of 11.647 million tons in 2021) and about a third of the company’s total revenue. According to the World Steel Association (WSA), EU countries produced 152.5 million tons of steel in 2021. Alexei Mordashov will have to look for new markets quickly, but experts doubt that under the current conditions, the billionaire will be able to take advantage of high market prices and a low ruble exchange rate.
In the meantime, the shares of Severstal are expected to fly down following the market, and the vacant place in Europe has already been noticed by the main competitor, ArcelorMittal.
So Alexei Mordashov still needs to try to keep the palm in the Forbes list of Russian oligarchs.