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Mechel Q2 coal output rises by 15% to 2.4 mln tons, steel output falls by 3%

Almost the entire volume of supplies to third parties was exported to Asia, including under long-term contracts, Mechel CEO Oleg Korzhov said

MOSCOW, August 29. /TASS/. Mechel increased coal production by 15% in the Q2 2023 to 2.4 mln metric tons and in the first half of the year, production decreased by 24% to 4.5 mln metric tons, the company said on Tuesday.

Steel production in the Q2 decreased by 3% to 881,000 tons, in the first half of the year - by 4% to 1.787 mln metric tons.

Pig iron and steel output went down quarter-on-quarter by 7% and 3% respectively "due to the overhaul of Chelyabinsk Metallurgical Plant’s blast furnace No. 5, which started in this reporting period," the company said.

"In Q2, the company increased coal output by 15% and thanks to the partial lifting of Russian Railways' restrictions on East-bound shipments, we were able to improve our sales figures. However, logistical barriers that put pressure on the company over the last two quarters, affected our coal production plans which we were forced to reduce, and so had a negative impact on actual sales results," Mechel CEO Oleg Korzhov commented on the operating results.

"Our sales divisions continue to closely monitor market conditions and look for the most profitable options for product sales. The overall 26% quarter-on-quarter increase in coking coal sales was due to increased output at Southern Kuzbass Coal Company’s mines. Almost the entire volume of supplies to third parties was exported to Asia, including under long-term contracts," he added.

Mechel reported earlier its net loss in the first half of 2023 reached 3.5 bln rubles ($36.37 mln) against 69.4 bln rubles ($721.17 mln) of profit a year earlier. In the Q2 2023, the company’s losses reached 2.4 bln rubles ($24.94 mln) against 1.1 bln rubles ($11.43 mln) of loss on the Q1. At the same time, Mechel’s revenue in the first half of the year decreased by 22% to 194.7 bln rubles ($2.02 bln), while its adjusted EBITDA fell by 49% to 40 bln rubles ($415.66 mln).