Mechel, one of the leading Russian mining and steel groups, has announced that in the first half of the current year its crude steel output decreased by nine percent to 1.86 million mt, while its pig iron output declined by 10 percent to 1.73 million mt, both year on year. In the January-June period, the company’s run-of-mine coal output decreased by 16 percent year on year to 8.13 million mt.
In the given period, Mechel’s coking coal concentrate sales amounted to 3.61 million mt, up three percent from the same period in the previous year, while its coke sales amounted to 1.26 million mt, increasing by four percent year on year.
As for the second quarter of 2019, the company registered a profit of RUB 1.4 billion ($21.1 million), decreasing by 88 perfect compared to the first quarter of the year. For the same period, Mechel’s sales revenues increased by five percent to RUB 78.47 billion ($1.18 billion), compared to the first quarter of the year. The operating profit of the company decreased by eight percent on quarter-on-quarter basis to RUB 9.92 billion ($149.61 million).
The revenue of Mechel’s mining segment from external customers in the second quarter totaled RUB 25.25 billion ($380.75 million), up three percent, while its steel segment revenues from external customers in the same year amounted to RUB 46.75 billion ($705.2 million), up 11 percent, both quarter on quarter.
Mechel-Steel Management Company OOO’s chief executive officer Andrey Ponomarev noted, “Currently prices for construction products remain high, even though the trend has turned downward as the second half of this year began.”
Ponomarev also stated that the downward trend in iron ore prices will also have a positive effect on the company’s profitability and that Vale’s resuming production at its assets with other iron ore producers’ increasing the output will help dampen prices.