Mechel cuts coal output 14% QoQ in Q1 2024, sales of coking coal concentrate rise 8%
MOSCOW. June 5 (Interfax) - Mechel cut coal production 14% quarter-on-quarter to 2.57 million tonnes in Q1 2024, the company said.
"The global coal market saw price stabilization and a return to 10-year averages during the reporting period. This has presented additional challenges for Mechel and other major Russian coal companies, as production and logistics costs, coupled with the implementation of duties on coal imports to China, have risen significantly, resulting in a drop in profitability. Under pressure from these conditions, we have focused on maintaining quarterly volumes of production at an acceptable level, and searching for the most profitable options for coal sales," Mechel CEO Oleg Korzhov was quoted as saying in the statement.
Overall sales of coking coal concentrate (CCC) rose 8% quarter-on-quarter to 930,000 tonnes in the reporting period on the back of previously accumulated warehouse stocks and growth in production at the Neryungri open pit.
Pulverized coal or PCI sales fell 17% to 250,000 tonnes and were affected by unfavorable prices as restrictions on the transportation of goods in effect at the railway network's Eastern Polygon.
Thermal coal sales rose 53% to 869,000 tonnes due to a change in the sales structure and the redistribution of shipments from export to domestic destinations with shorter distances. During the reporting period, a contract was signed for the supply of this grade of coal to a large energy company. However, prevailing market conditions during the reporting period had a negative impact on prices.
The drop in output at Korshunov Mining caused iron ore concentrate sales to fall 28% to 185,000 tonnes.
Steel segment enterprises, in particular at tChelyabinsk Metallurgical Plant , began an extensive repair program at the beginning of 2024, causing production plans for the production of pig iron and steel smelting to be adjusted; these figures decreased by 12% to 701,000 tonnes and 758,000 tonnes, respectively.
Mechel production:
Product Q1 2024 Q4 2023 Change Run-of-mine coal, kt 2 568 2 980 -14% Pig iron, kt 701 796 -12% Steel, kt 758 863 -12% Electric power generation (thousand kWh) 555 792 604 507 -8% Heat power generation (Gcal) 2 028 082 1 728 295 +17%
Mechel sales, kt:
Product Q1 2024 Q4 2023 Change Coking coal concentrate 930 865 +8% Including coking coal concentrate supplied to third parties 657 509 +29% PCI 250 300 -17% Including PCI supplied to third parties 250 300 -17% Anthracites 259 256 +1% Including anthracites supplied to third parties 229 222 +3% Thermal coals 869 569 +53% Including thermal coals supplied to third parties 742 434 +71% Iron ore concentrate 185 259 -28% Including iron ore concentrate supplied to third parties 9 9 -2% Coke 451 572 -21% Including coke supplied to third parties 110 189 -42% Ferrosilicon 19 18 +6% Including ferrosilicon supplied to third parties 15 13 +9% Long rolls 582 570 +2% Flat rolls 88 83 +6% Hardware 103 100 +3% Forgings 9 8 +13% Stampings 15 16 -6%
