Mechel Reports Six Month Operations Results
07/16/2009 - Mechel OAO reports the production of 1.397 million tonnes of steel in the second quarter, a 27% increase from the previous quarter.
Mechel OAO reported the production of 1.397 million tonnes of steel in the second quarter, a 27% increase from the 1.1 million tonnes produced in the previous quarter.
The company also produced 274,000 tonnes of billets in the first quarter (a 7% decrease vs. the previous quarter); 79,000 tonnes of flat product (an 18% increase over the previous quarter); and 988,000 tonnes of long products (a 39% increase vs. the previous quarter).
The company also produced 274,000 tonnes of billets in the first quarter (a 7% decrease vs. the previous quarter); 79,000 tonnes of flat product (an 18% increase over the previous quarter); and 988,000 tonnes of long products (a 39% increase vs. the previous quarter).
"First quarter of 2009 was rather challenging for Mechel as well as for the whole mining and steel industry,” noted Vladimir Polin, Senior Vice President of Mechel OAO, commenting on corporate operations results for the first half of 2009. “However, starting from the second quarter we observe certain positive dynamics in the markets of steel products we produce. Active development of own sales network and expanding our sales geography allowed us to provide our plants with off-take orders.”
“We commissioned all production units suspended at our facilities in fourth quarter of 2008,” continued Polin. “Steel and ferroalloys segments' capacity utilization reached pre-crisis levels and at some plants was even higher.
“I would like to note that Mechel became the first Russian steelmaker that started to recover coke production during crisis,” added Polin. “We continue to produce most downstream products increasing the share of high value added products in our portfolio while reducing billets production, which can be observed in our second quarter results. Due to introduction of anti-crisis measures in the second quarter, we posted production growth almost in all steel segment products.
Polin explained the decreased demand for coking coal had led the company’s mining division to concentrate on finding new customers, particularly in Asia, resulting in large scale long-term contracts with Chinese, Japanese and South Korean companies. The new contracts allowed the company to increase its utilization of coking coal mining capacity in the second quarter, laying the groundwork for its restoration to pre-crisis levels. Some increase in Russian and Chinese steel production also helped the company to increase its iron ore concentrate production.
"In general,” concluded Polin, “taking into account the emerging tendencies, we have a positive outlook for the second half of 2009 and intend to continue our activities in order to increase production, tapping new market niches and increasing the company's share in the markets we specialize at."
Mechel, one of Russia’s leading companies, unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, nickel, hardware, heat, and electric power. Its business includes four segments—mining, steel, ferroalloys and power—and its products are marketed domestically and internationally.
