According to the figures for 2023, Mechel demonstrates a complex dispersion. Despite the challenges on the one hand the company shows growth in some areas.
In 2023, the company continued to renew its equipment fleet in the mining division. However, it met serious challenges related to Russian Railways' infrastructure restrictions for transporting products to the East. Logistical problems prevented Mechel from producing coal as planned and forced it to change its sales policy. As a result, Mechel had to change some of its operating indicators.
Coal production decreased by 8% year-on-year, which was due to lower steam coal production at Yuzhny Kuzbass and Yakutugol, as logistical difficulties led to a shift to higher-yielding products.
Coal coke sales decreased by 21% due to lower production at the Neryungrinsky opencast mine.
PCI sales increased by 53% due to the sale of accumulated reserves.
Anthracite sales decreased by 16% as a result of reduced customer numbers in the West, but showed positive development due to sales to Asia in 2023.
Steam coal sales decreased by 28% due to infrastructure restrictions and reduced demand from a large local customer.
Iron ore concentrate sales declined by 31% driven by lower production at the Korshunovsky opencast mine due to challenging hydrogeological conditions.
Coal production and sales increased by 3% y-o-y in 2023, driven by favourable market conditions in Russia.
The restoration of mines increased iron and steel production in the fourth quarter of 2023, which helped to keep production at the previous year's level.
Mechel's steel division launched a programme to increase its share of sales of high-margin products. As a result, total long product sales declined by 7% year-on-year, mainly due to lower rebar shipments.
Flat product sales decreased by 9% y-o-y due to planned repair works.
Sales of metal products decreased by 8% y-o-y due to limited exports and lower demand for wire in the Russian market.
The Ural Kuznitsa plant increased production of stamped products in 2023, which led to a 9% increase in sales. Sales of forged products decreased by 14% due to the loss of export markets. The Energy division held electricity production at last year's level, while heat production decreased by 2% due to lower hot water consumption in the operating regions as a result of warm weather.
According to CEO Oleg Korzhov, coal prices in 2023 decreased compared to 2022, but remained at an acceptable level for Mechel. The rebalancing of the global commodity market is completed, with China and India becoming the main players. In the Asia-Pacific region, demand for coal continues due to the development of the steel industry and coal-fuelled power production.
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