Sanctions just 'amplify tensions': Russian steel chief

Sanctions imposed by some of the Western powers against Russian business are not hurting yet and only serve to "amplify tensions", according to the head of Russia's biggest steelmaker.

Alexey Mordashov, chief executive of Severstal, told CNBC at the St Petersburg Economic Forum (Spief) it was important for "all parties" to negotiate a solution to the crisis in Ukraine. Mordashov was quick to refute any suggestion that the tensions had affected Severstal, but warned that they may damage relationships in the long-term.

Sovfoto | UIG | Getty Images

A Severstal plate-rolling shop in Cherepovets, Vologda region, Russia

The struggle over Ukraine's future has led to a tense diplomatic standoff between Russia and some of the Western powers, led by the U.S. Russian troops appeared to have left the country's border with Ukraine Wednesday, ahead of crucial presidential elections in the former Soviet bloc country this weekend.

Mordashov also denied reports that Severstal was planning to sell its U.S. plants, and said the decision had not been taken yet.

Read More Severstal is 'on track': CFO

The Russian billionaire has spent about $6 billion and 10 years building his portfolio of American plants, including one first built by legendary U.S. businessman Henry Ford.

Profit margins have been hit by the financial crisis, and by competition from cheaper foreign exports.

Read More Margins big issue for steel: Severstal CEO

Follow us on Twitter: @CNBCWorld