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. Last Updated: 07/27/2016

Severstal Nets $304M in H1

No. 2 steelmaker Severstal reported a profit in the first half, from a loss in the year-earlier period, as world prices and domestic demand for steel both rose.

Net income totaled 9.23 billion rubles ($304 million), compared with a net loss of 1.17 billion rubles, based on Russian accounting standards, Severstal said in a report on its web site. Sales rose 58 percent to 39 billion rubles, while production costs rose 29 percent.

"Severstal has managed to reroute its sales to the domestic market much more efficiently than we anticipated," said Alexander Pukhayev, an analyst at United Financial Group.

Severstal, which makes 18 percent of Russia's steel, is controlled by a group led by the company's CEO Alexei Mordashov, Russia's 10th-richest man.

The company, based in Cherepovets in northern Russia, plans to invest $715 million through 2007 to boost production amid rising demand from Russian oil producers, shipyards and carmakers.

Hot-rolled steel averaged $296 per metric ton in January through June, almost one-third higher than in the same period last year, according to the Metal Bulletin.