Company DigestCompaniesLast updated: 2 April 2025

Severstal Begins Cold Commissioning of Mill 170, a RUB 15 Billion Bar and Wire Rod Project at the Cherepovets Steel Mill

Severstal (Северсталь) (MOEX: CHMF) has begun cold commissioning of Mill 170, a new bar and wire rod mill with an annual capacity of 900,000 tonnes at the Cherepovets Steel Mill (ЧерМК). The RUB 15 billion project, originally scheduled for launch in 2022–2023, required the replacement of its European equipment supplier with a Chinese one. Hot commissioning is planned for the fourth quarter of 2025, with design capacity to be reached in the first half of 2026. About 70% of the mill's output will be directed to Severstal-Metiz (Северсталь-Метиз), the company's hardware subsidiary.

Hot steel rod passing through rolling equipment

Cold commissioning begins at the Cherepovets Steel Mill

CHEREPOVETS, April 2, 2025 — Severstal (Северсталь) has announced the start of cold commissioning of Mill 170, its new bar and wire rod mill at the Cherepovets Steel Mill (ЧерМК) site. Cold commissioning covers the rotation and adjustment of the drives of the roughing and intermediate groups of mill stands, the stage that precedes any hot rolling. During 2025 the company plans to bring part of the mill's equipment into operation; corporate announcements and media materials are published on the company website at https://severstal.com/.

The project, valued at RUB 15 billion, was originally scheduled for launch in 2022–2023. Its timeline shifted after the European supplier of the main equipment had to be replaced with a Chinese one, a change that required reworking part of the mill's configuration. In 2024 Severstal (Северсталь) produced 10.4 million tonnes of steel, and Mill 170 is intended to add a modern wire rod and bar capacity to this base.

Commissioning schedule and design capacity

The company has set out the following sequence of milestones for the project:

Cold commissioning — rotation and adjustment of the drives of the roughing and intermediate mill stands (announced as started);
2025 — bringing part of the mill's equipment into operation;
Fourth quarter of 2025 — hot commissioning of the mill;
First half of 2026 — reaching the design capacity of 900,000 tonnes per year.

The staged approach means that the mill will first prove its mechanical and drive systems without metal, then move to hot rolling trials before ramping to the nameplate output of 900,000 tonnes of finished product a year.

Product mix: sorbitized wire rod first, bar and rebar later

Mill 170 is designed to produce sorbitized wire rod, the feedstock for hardware (fasteners and wire products) manufacturing. Around 70% of the mill's output will be supplied to Severstal-Metiz (Северсталь-Метиз), securing an internal customer for the bulk of the new capacity. The product programme and its downstream routing include:

sorbitized wire rod as the primary product of the new line;
about 70% of output directed to Severstal-Metiz (Северсталь-Метиз);
round bar products and rebar to be added to the line's range in the future;
replacement of the older mills 150 and 250 by the new rolling line.

The substitution of mills 150 and 250 concentrates rolling operations on a single modern line, while the wire rod feedstock keeps the company's hardware division supplied from its own steel.

Supplier change and project economics

Alexander Shevelev (Александр Шевелев), chief executive of Severstal (Северсталь), said the company faced the necessity of changing the supplier of the main equipment and found a solution that improves the technical parameters compared with the original configuration. In 2020 the supplier of the mill's equipment was named as the Italian company Danieli, according to AK&M data; the identity of the new Chinese supplier has not been disclosed.

Maxim Khudalov (Максим Худалов), chief strategist at the management company Vector Capital (УК «Вектор Капитал»), estimated that the project could have become more expensive by up to RUB 100 million because of rising equipment and logistics costs and the "re-assembly" of the mill following the supplier change.

Expert views on timing and demand

Industrial expert Leonid Khazanov (Леонид Хазанов) believes Mill 170 may well be commissioned on schedule, while noting that demand from Severstal-Metiz (Северсталь-Метиз) could turn out lower than expected because of stagnation in construction. Maria Kolomiets (Мария Коломиец) of the rating agency Expert RA («Эксперт РА») said she does not expect deviations in the strategy for selling the mill's products, although she allows that the launch could be slowed by external factors.

Market context: wire rod and hardware in Russia and the CIS

The capacity of the steel wire rod market in Russia and the CIS countries is estimated at 2.3–2.5 million tonnes, while Russian production amounted to 0.7–1 million tonnes by the end of last year. On the domestic market the new mill will face competition from established hardware and rolling producers:

MMK-Metiz (ММК-Метиз);
Promsort (Промсорт);
Novostal-M (Новосталь-М);
in the CIS — the Belarusian Steel Works (Белорусский металлургический завод).

According to Maxim Khudalov (Максим Худалов), the Russian market is filled with cheap, low-quality Chinese hardware products, which sets a demanding price environment for new domestic capacity. Exports of Mill 170's products are also planned, although the directions have not been specified; in Khudalov's assessment, shipments would go primarily to the Middle East, Iran and Latin America.