SVST.L Regulatory News (SVST)

Severstal reports Q3 2014 and 9M 2014 operational results

Moscow, Russia - October 15, 2014 - OAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q3 2014 and 9M 2014.

Q3 2014 GROUP HIGHLIGHTS

● On 19 August 2014, Severstal announced that it has completed the sale of PBS Coals Inc., a metallurgical coal producer located in Pennsylvania, USA., to Corsa Coal Corp., a Canadian public company. In regard to the sale and in full accordance with IFRS standards Severstal continues to report operational results of PBS Coals Inc. till 19 August 2014- the disposal date, which are included in the Group's Q3 2014 and 9M 2014 consolidated operational results

● On 16 September 2014, Severstal announced that it has completed the sale of its Severstal Columbus, LLC and Severstal Dearborn, LLC subsidiaries, collectively known as Severstal North America (SNA), to Steel Dynamics, Inc. and AK Steel Corporation, respectively. In regard to the sale and in full accordance with IFRS standards Severstal has fully ceased reporting operational results of SNA and made restatements to consolidated operational results of the Group for the previous periods

● Crude steel production increased 1% q/q to 2.86 mln tonnes (Q2 2014: 2.83 mln tonnes), which coupled with 3% q/q increase in hot metal production suggests lower consumption of scrap material in steelmaking process in Q3 2014

● Consolidated sales of steel products decreased by 1% q/q reflecting decrease in semi-finished products sales

● The share of high value-added products in the sales portfolio increased by 6 bpts to 53%

● Steel assets ran at near to full capacity in Q3

SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA*

SEVERSTAL RESOURCES

●Iron ore pellets sales increased 8% q/q on the back of higher demand on export markets. Moreover, we note that internal pellets consumption decreased q/q, which is a function of higher Fe content pellets from Karelsky Okatysh being used at CherMK.

●Prices for iron ore pellets at Karelskiy Okatysh decreased by 18%, while prices for iron ore concentrate at Olkon decreased by 22%. That said, due to shattered profitability of third party iron ore concentrate sales we have fully reduced external shipments in Q3 2014, which is the key reason of 6% q/q decrease in iron ore concentrate sales volumes.

● We note that Severstal Resources division coking coal concentrate sales volumes increased by 6% q/q. Meanwhile, consolidated numbers have been distorted by PBS Coals performance, with sales volumes being artificially down 51% q/q (on the back of the asset sale deal being closed in August). Nevertheless, coking coal concentrate sales volumes at Vorkutaugol increased by 18% q/q as quite a remarkable outcome has been achieved in terms of long wall repositioning progress. A new face at Severnaya mine has been commissioned at the very beginning of August as well as a new face at the Troynoi seam (Vorkutinskya mine) at September. To recap, in 2014, Vorkutaugol will commission 11 new coalfaces across all five of its mines, with two faces left to be commissioned till the year end at Komsomolskaya mine.

● Following the capacities increase at Pechorskaya beneficiation plant, we have started to reprocess all the amount of raw coking coals. Steam coal sales at Vorkutaugol were down 31% q/q reflecting temporary engineering constraints at several coal faces.

SEVERSTAL RUSSIAN STEEL

●Severstal Russian Steel (RSD) steel products sales remained flat q/q at 2.7 mln tonnes. Meanwhile, we highlight that notwithstanding sharp decline in semi-finished products sales (down 91% q/q) due to BOFs scheduled maintenance, sales volumes of rolled products and downstream products increased by 4% q/q and 16% q/q respectively reflecting seasonally robust domestic market and strong demand on the export markets

●Solid growth has been largely driven by sales of hot-rolled plates (up 14% q/q), galvanized and metallic coated coils (up 23% q/q) and color coated coils (up 20% q/q)

● Abovementioned factors resulted in substantial increase of the share of high value-added (HVA) products in the sales portfolio from 47% to 52%

● Furthermore, sales of large diameter pipes increased more than two-fold (by 125% q/q) partially due to the low base effect, with sales in Q2 being negatively affected by technical transportation constraints for that type of product, resulted in delayed recognition of shipments from Izhora Pipe Mill (part of Severstal's Russian Steel division) for the South Stream Pipeline. At the same time in Q3 Severstal launched shipments for the Power of Siberia and Southern Corridor pipelines, which enabled the Izhora Pipe Mill to run at a high utilization rate

● USD-nominated prices for almost all steel products at RSD remained barely flat q/q in Q3 (on average). Meanwhile, we highlight that RSD was able to increase RUB-nominated sales prices reflecting catch up in prices on the back of further RUB depreciation.

SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

1) All production data is reported in metric tonnes;

2) Sales prices are stated on EXW basis;

3) Segmental data includes intercompany sales;

4) Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;

5) Metalware sales volumes and metalware average selling prices include Severstal Metiz, Cherepovets Steel Mill, Severstallat and Severstal Invest data;

6) Large diameter pipes include all pipes with a diameter between 820 and 1420 mm;

7) Group and RSD volumes and average selling prices for 9M2013 were restated due to a change in recognized revenues, based on a re-classification of products.

Investor Relations

Vladimir Zaluzhsky

T: +7 (495) 926-77-66 ext. 6375

vladimir.zaluzhsky@severstal.com

Public Relations

Elena Kovaleva

T: +7 (495) 926-77-66 ext. 6447

elena.kovaleva@severstal.com

Severstal's financial communications agent - Hudson Sandler

Andrew Hayes / Maria Ignatova / Alex Brennan

T: +44 (0) 20 7796 4133

ОАО Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Severstal is listed on RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $9,434 million* and EBITDA of $1, 818 million* in 2013. Severstal's crude steel production in 2013 reached 10.7 million tonnes*. www.severstal.com

* These amounts reflect adjustments made in connection with the presentation of the discontinued operation.