Russian miner Mechel OAO (MTL) has released its operational results for the second quarter of 2014. Mechel's coal production was 5,633,000 tons in the quarter, an increase of 1% sequentially. Steel production went up 6% from the previous quarter to 1,096,000 tons. Pig iron production increased 3% sequentially to 964,000 tons. The sequential increase was due to stable demand for Chelyabinsk Metallurgical Plant's products.
Coking coal sales went up 5% sequentially to 2,743,000 tons in the reported quarter due to stable exports, mainly those that the company contracted with steelmaking holdings in Asia Pacific and a considerable increase in supplies to Mechel Coke OOO for restocking. The price of coking coal reached its seven-year low in the second quarter and the company expects a gradual recovery in prices. The sales of PCI and anthracites were up 75% sequentially due to higher exports, particularly to China.
Iron ore concentrate sales declined 6% sequentially to 913,000 tons. Steam coal sales went down 14% sequentially to 1,167,000 tons due to a seasonal slump in demand from both external customers and the company’s enterprises. Mechel is actively working on expanding steam coal sales in growing Asian markets.
Sales of flat products rose 2% sequentially to 115,000 tons and those of long products increased 3% from the sequentially-prior quarter to 806,000 tons due to a seasonal increase in demand.
Stampings sales declined 5% from the previous quarter due to weak demand and high competition from foreign producers. Forgings sales were up 24% sequentially to 14,000 tons.
There was a 16% and a 53% sequential decrease in electricity production and heat production, respectively, due to seasonal changes.
Mechel is a leading domestic steel and coal producer with a strong position in key businesses, including production of specialty steel and alloys. The company currently carries a Zacks Rank #4 (Sell).
Other companies in the steel and related industries with favorable Zacks Rank include Grupo Simec S.A.B. de C.V. (SIM), Olympic Steel Inc. (ZEUS), and ThyssenKrupp AG (TYEKF). While Grupo Simec sports a Zacks Rank #1 (Strong Buy), Olympic Steel and ThyssenKrupp carry a Zacks Rank #2 (Buy).