Within a strategic task of providing Russian defense industry with high quality steel Severstal started production of special brands of steel for use in bodies of submarines and ships. One of the first clients who bought steel for these purposes was Sevmashpredpryatiye (Severodvinsk).The company ordered 520 tonnes from Severstal in February. It's being produced and will be shipped to Severodvinsk in April-May.

In January, Sevmashpredpriyatiye already received a pilot batch of sheet still of high quality with special characteristics. This type of metal is a brand new product for the Russian steel industry. Steel for the Russian navy was formerly produced by the Ukrainian plants built in Soviet time specifically for these products.

Severstal and St. Petersburg research institute Prometei jointly developed production technology. This technology is cost saving as it uses alloy scrap metal obtained from disposed ships.

New brands of steel were mastered in less than a year within a project that is aimed at strengthening Severstal's standing in shipbuilding. In 2002, Severstal will supply 5-6 tonnes of special brands of steel to the Russian navy.

In 2000, Severstal sold 47,000 tones of sheet metal. In 2001, this volume grew by 60% and reached 75,000 tones. Severstal plans to further increase its supply to the Russian navy up to 98,500 tones in 2002.

Admiralteiskiye Verfi, Sevmachpredpriyatiye, Volgogradski Sudostroitelni Zavod, Viborgski Sudostroitelni Zavod, and Severnaya Verf ship building plants are Severstal's key customers.