Mechel, one of the leading Russian mining and steel groups, has issued its operational results for the first quarter of 2009.
Accordingly, during the given period the company saw a 52.9 percent decrease in its coal
production to 3.43 million mt (including a 76.3 percent decrease in its
coking coal production to 1.02 million mt), a 46.5 percent drop in its coal concentrate output to 2.21 million mt (including a 73.4 percent decrease in its
coking coal concentrate
production to 884,000 mt), a 20 percent drop in its
iron ore concentrate
production to 929,000 metric tons, and a 40.8 percent decrease in its coke
production to 543,000 mt, all compared with Q1 2008.
Accordingly, in Q1 2009
Mechel changed its mining plans in favor of increased
production of steam coal, for which there was stable demand, and doubled the output of steam coal concentrate to 884,000 mt year on year.
In its steel segment, in Q1 2009
Mechel saw a 29.3 percent decrease in its
pig iron production, a 29.6 percent drop in its crude steel
production and a 21.6 percent decrease in its finished steel products output (including a 42 percent decrease in
flats output, a 13 percent drop in
longs output, and a 32.1 percent drop in
semis production) year on year. The respective figures in metric tons were 686,000, 1.1 million, and 1.07 million (including 67,000 of
flats, 710,000 of
longs and 294,000 of
semis).
According to the company's release, in Q1 2009
Mechel continued to implement its strategy of increasing the output of high-margin downstream products, leading to a decrease in the share of low-marginable products (billets) in its product portfolio. However, the overall reduction of steel and rolled product output was stated to be in line with market trends. Meanwhile, the drop in the company's
pig iron output resulted from the shutdown of Chelyabinsk Metallurgical Plant's blast furnace No. 4 for scheduled repair works. The furnace was recommissioned at the beginning of April 2009.
Commenting on the Q1 2009 operational results,
Mechel's senior vice-president Vladimir Polin stated, "Negative trends caused by the global economic crisis affected
Mechel's operational results in Q1 2009. Unfavorable market conditions and, most of all, a drop in demand in the
construction and machinery industries, caused reduction of output in our steel division and further in all other segments of our
production chain...We continue to monitor our markets and will make prompt responses to changes in demand ensuring stable operations of the company in the current economic environment."