Mechel survived this situation fairly well, the company did not halt any of its facilities and preserved its staff, did not revamp its production plans.
Mechel is one of global TOP-10 metallurgical coal producers and one of the global leaders by production volume of coking coal concentrate.
Economic activity in most Asia-Pacific states picked up in 3Q 2020.
Today clients are highly interested in the company´s coal products, which is due to stable demand and incremental growth of steel output in the region.
By the end of 2020, spot prices for coking coal concentrate reached $202 per tonne CFR China.
Over 2 months, in October - beginning of December, the price went up by 62% and continued to grow.
The upward dynamics of the spot market affects quarterly contract prices as well.
Mechel’s CEO Oleg Korzhov commented on operational results:
- Mechel’s facilities mined a total of approximately 16 million tonnes in 2020, which is 10% YOY;
- This is due to increased stripping volumes and implementation of our mining equipment modernization program;
- A minor decrease (2%) of our coking coal concentrate sales was due to a slump in our sales to Japan as that country’s major steelmakers adjusted annual steel output plans;
- We promptly redirected those released volumes primarily to South Korea.
As for anthracites, their sales to 3rd parties grew by 92% due to increased mining at Krasnogorsky Open Pit.
In this accounting period, Mechel has boosted sales to European clients by 54% and nearly tripled our sales to Asia, primarily to premium South Korean and Japanese markets.
In 2020, sales of thermal coals went up by 26% due to increased output at Yakutugol Holding and sales of accumulated stock.
A major share of those sales went to Vietnam (+76% YoY).
To read the article in Russian.