Russian mining and steel company Mechel has reported increasing quarter-on-quarter earnings in 3Q16 – with the promise of more to come in 4Q16 as the impact of strong metallurgical prices take effect. The company’s earnings rose 22% quarter on quarter to RUB9.54 billion, despite lower revenues, as the company focused on reducing costs.
“The rapid growth of coal prices, which bagan in mid-summer, didn’t have time to make a full impact on the third quarters financial results,” said Mechel Mining’s CEO Pavel Shtark. However, Shtark was positive looking forward: “The current favourable market situation will definitely be reflected in the results of the fourth quarter and future periods.”
“Spot prices on high-quality coking coal continued to grow and are currently set at their historically highs, topping US$300 per tonne, at a significant difference with contract prices set for the fourth quarter,” continued Shtark. “ Negotiations for 1Q17 basic prices will start shortly and, considering the spot market indications, we can expect the contract price level for the first quarter to be significantly higher quarter on quarter.”
The company mine 5.6 million t of ROM coal in 3Q16 to bring the yearly total to 17.1 million t, a 2% fall on the previous year.
Read the article online at: https://www.worldcoal.com/coal/05122016/mechel-sees-good-time-ahead/