Mechel, one of the leading Russian mining and steel groups, has announced its production and sales results for the first quarter this year, with no significant impact from the Covid-19 pandemic.
In the January-March period this year, Mechel produced 876,000 mt of crude steel, down six percent year on year, but up two percent quarter on quarter. The company’s pig iron production increased by 10 percent quarter on quarter to 872,000 mt, achieving the level of the same period in the previous year. The increase in both pig iron and steel outputs quarter on quarter is a result of the completion of a large-scale upgrade of the blast furnace and oxygen converter workshops at its Chelyabinsk Metallurgical Plant. Meanwhile, the production of run-of-mine coal totaled 5.188 million mt, up 47 percent year on year, but down four percent quarter on quarter, caused by a temporary suspension of mining at its Neryungrinsky open pit in January, aimed at decreasing coal stocks accumulated due to the congestions at the Far Eastern ports of Posiet and Vanino.
In the first quarter this year, Mechel’s coking coal concentrate sales remained at the previous year’s level of 1.684 million mt, but decreased by eight percent quarter on quarter, SteelOrbis has learned. However, in the given period sales to third parties went up by five percent quarter on quarter to 1.048 million mt, primarily due to increased shipments to Japan, which were up 51 percent quarter on quarter.
The company’s thermal coal sales totaled 1.212 million mt in the first quarter, down nine percent year on year, but up three percent quarter on quarter. In the given period, the company redirected sales from Asia (China and Vietnam) to the domestic market amid more favorable market conditions.
In the first quarter, the company’s total sales of long steel products increased by seven percent year on year and five percent quarter on quarter to 648,000 mt. In the meantime, the sales of flat steel products totaled 124,000 mt, up seven percent year on year and 11 percent quarter on quarter, respectively.
“Despite the pandemic, the steel division’s sales remained stable in the first quarter. We foresee a negative impact on sales in the second quarter. April-May is the traditional time for a spike in demand from construction and steel sales companies, but, with ubiquitous restrictive measures in place, we have seen no expected sales increase in early second quarter,” Mechel’s CEO Oleg Korzhov commentsed.
During the given year, Mechel’s ferrosilicon sales decreased by 25 percent year on year and 19 percent quarter on quarter to 13,000 mt, SteelOrbis has learned.