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Mechel posts 2% QOQ rises in Q3 coal, pig iron output; steel production down 9%

Russia's Mechel PAO on Nov. 28 posted mixed third-quarter production results, with run-of-mine coal and pig iron output each increasing by 2% quarter on quarter and steel production down by 9%.

The company produced 5.4 million tonnes of run-of-mine coal and 1 million tonnes of pig iron, while steel production fell to 1 million tonnes due to planned repairs at the Chelyabinsk metallurgical plant.

During the first nine months of the year, Mechel produced 15.7 million tonnes of run-of-mine coal, an 8% decrease year over year, while pig iron increased by 1% to 3 million tonnes, and steel production increased by 3% to 3.2 million tonnes.

Mechel posted a 9% quarter-on-quarter decrease in sales of coking coal for the third quarter to 1.9 million tonnes, citing transportation issues related to the Russian railways network.

Sales of steam coal also fell, down 6% on a quarterly basis to 1.5 million tonnes, due to the coking coal mining component increasing at the company's Yakutugol operation and the Elga deposit as well as the railway issues.

The Yakutugol operation comprises the Dzhebariki-Khaya, Kangalassky and Neryungrinsky mines.

Iron ore concentrate sales fell 15% quarter over quarter to 637,000 tonnes due to lower iron content in the ore, which the company deemed a temporary issue.

"In 2017, the trend for increased imports of high-quality coking coal to China was marked, and we can say now that in 2017 imports to this country will reach a four-year maximum," CEO Oleg Korzhov said. "Mechel is consistently working on increasing its coal sales to China and other Asia Pacific countries."