MOSCOW, November 22. /TASS/. Severstal currently supplies 80% of its production to Russia’s domestic market, whereas 20% of products are delivered to foreign markets, Chief Executive Officer of the steel and mining company Alexander Shevelev said at the RBC.TECH forum on Tuesday.

"As of today, 80% of [our] products are supplied to the Russian market and 20% are supplied [to foreign markets]," he confirmed.

Meanwhile, the logistics costs for sales to Southeastern Asia, CIS and non-CIS countries account for 20-40% of the final cost of products, Shevelev added.

According to the CEO, Russian metal producers should provide 70 mln tons of metal products per year to ensure full capacity utilization, whereas the domestic market only consumes 40 mln tons.

"Thirty million tons of metal products are unnecessary today, they cannot be sold on the Russian market, we do not consume such volumes, which is why those 30 mln tons should be effectively exported somewhere. Otherwise, we will have to substantially shut down production and lay off our personnel <…> it's a very significant increase in costs with all the resulting social problems," he explained.

Competing on global markets, Russian metal producers deeply and seriously applied global solutions in the area of software, technology and equipment, which is why it is hardly possible to shift to analogues swiftly, Shevelev noted.

"Speaking about equipment or imported components, as of today, Severstal particularly work with over 40,000 articles, items, goods, components, spare parts, which require replacement in quite a short period of time, because as you understand, there have never been such reserves, and after the sanctions saga many foreign suppliers indeed refused to work," he pointed out.

Severstal’s chief executive referred to the lack of the sector’s ability to charter and insure cargo vessels as a challenge because now the largest shipowners are foreign companies that are not ready to work with Russia due to the ongoing restrictions.

"Disruptions throughout the supply chain are happening everywhere <...> that's why business needs support, not support in the form of subsidies. Business will earn its own as it competes, it is used to competing in a competitive environment. But we need support both in terms of insurance and logistics channels, and in terms of possible access for Russian business today to Western technologies and not only Western ones. I think those tasks are already being solved by the state today," he concluded.

Severstal is a vertically integrated steel and mining company and one of Russia’s largest steel producers. The Cherepovets Steel Mill is the company’s key asset. Its production capacity roughly totals 12 mln metric tons of steel per year.