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."