(Adds CEO comment)
MOSCOW Nov 29 Metals and mining group Mechel
posted a third-quarter net loss of 2.8 billion roubles
($43 million) as a surge in the price of its main product coking
coal came too late to bolster its earnings but will boost its
fourth quarter, it said.
Prices for coking coal - a key component in steel
production, - have more than doubled since July on expectations
of lower supply, sending Mechel's shares to three-year
Mechel, Russia's second-biggest coal producer after market
leader Evraz, said on Tuesday even though spot coking
coal prices were currently at more than $300 per a tonne this
had not supported its financial earnings in the third quarter.
"The rapid growth of coal prices, which began in mid-summer,
didn't have time to make a full impact on the third quarter's
financial results," Mechel Mining Management Chief Executive
Officer Pavel Shtark said.
"We saw this hike's reflection in our contracts only by the
very end of this reporting period," he said. "The current
favourable market situation will definitely be reflected in the
results of the fourth quarter and future periods."
Chief Executive Oleg Korzhov said he hoped coking coal
prices would remain at current levels into the first quarter of
Mechel, which was hit by a collapse in global steel prices,
has been in lengthy talks with creditors to restructure its
debts and is yet to sign final debt restructuring deals with all
Mechel said its coking coal sales fell 10 percent in the
third quarter to 2 million tonnes, but it had increased sales to
China, Japan and India in the period.
Steel and coal production both fell 5 percent
quarter-on-quarter to 1 million and 5.6 million tonnes
respectively, the company said.
Mechel's third-quarter core earnings totalled 15.9 billion
roubles, up slightly from 15.7 billion roubles in the previous
quarter. Revenue slipped from 68 billion roubles to 66.2
billion. The company made a net profit of 8 billion roubles in
the second quarter of this year.
(Reporting by Jack Stubbs; Editing by Jane Merriman and