It is reported that Severstal, Russia’s biggest steelmaker, is deferring indefinitely an ambitious USD 8 billion investment program in a further sign of how the downturn is forcing manufacturers to cut capital spending.

Severstal said that due to the tougher climate for steel, the “majority” of the program was being deferred “until market visibility and conditions improve.”

Mr Alexei Mordashov CEO of Severstal’s said that his company’s actions are needed to allow the group to continue to operate profitably in a tougher environment.

The company’s USD 8 billion investment program, announced that just over a year ago, had been due to take place in the three years to the end of 2011. Most of it is aimed at increasing output and adding to steel quality, at Severstal’s main Russian plants. Other parts of the project had been targeted at the company’s steel sites in the US, France and Italy while some was earmarked for expanding iron ore mining in Russia.