This paper describes the way of producing a new kind of a ferromagnetic composite with a high susceptibility to elastic deformations and a low electric resistance. The composite consists of silicon steel particles dispersed in a silicone matrix filled with graphite. Elongation, substitute magnetic permeability and substitute resistivity of the composite depend on stresses, temperature and current density. The obtained results are discussed and compared. The result suggest that there may be a practical application for this kind of composite.