Moscow, Russia – November 17, 2022 – Mechel PAO (MOEX: MTLR, NYSE: MTL), one of the leading Russian mining and metals companies, reports 3Q2022 operational results.

Mechel PAO’s Chief Executive Officer Oleg Korzhov commented on the results:

“In the first half of 3Q2022 global price indexes for coking coal concentrate demonstrated a downward trend. In the second half of this reporting period they bounced back to a stable level. This market trend was due primarily to China’s harsher quarantine measures in the summer months, which led to limitations in the work of the country’s steelmakers and a slump in sales of finished steel products. Prices went up again in mid-August in hopes for a stable demand in China’s and India’s steel industry.

“In this reporting period, Mechel decreased its quarterly overall coal output by 12% due to a decrease in mining at Southern Kuzbass Coal Company’s facilities. This factor, as well as the increased periods of delivery to ports due to railway repairs that limited the railroad infrastructure’s carrying capacity, prompted the 15-percent decrease in coking coal concentrate’s sales quarter-on-quarter.

“Our PCI exports to South-East Asia and Asia Pacific were performed on a stable basis. We increased PCI sales by 15% quarter-on-quarter. As for anthracites, due to introduced logistical limitations we are redirecting our sales volumes and expanding into new markets, including Russia’s own domestic market and that of the CIS. The 14-percent decrease in anthracite sales quarter-on-quarter was due to a contracted batch’s delivery put off until the fourth quarter of 2022.

“The 21-percent hike in thermal coal sales was due to our involving stockpiles accumulated by 3Q2022.

“Sales of Korshunov Mining Plant’s iron ore concentrate went down by 9% quarter-on-quarter as its chief consumer, Chelyabinsk Metallurgical Plant, had less need of it. A similar picture — the decrease in commodity demand from Russian majors as well as changes to market geography — led to a seven-percent quarter-on-quarter decrease in coke sales.

“In this accounting period, Chelyabinsk Metallurgical Plant held a major overhaul campaign, which involved blast furnace #1, converter #2 and concaster-5. This led to a decreased output of pig iron and steel (by 9% and 10% respectively compared to 2Q2022). Overall sales of rolled longs went down by 5% due to decreased exports. The downward trend in average prices for steel rolls, which began in 2Q2022, became even more pronounced in the third quarter. Sales of rolled flats remained mostly at 2Q2022’s level.

“Introduced export bans led to a 35-percent slump in sales of Bratsk Ferroalloy Plant’s ferrosilicon sales, compared to the previous quarter.

“The six-percent increase in hardware sales quarter-on-quarter was due to a hike in domestic sales of Beloretsk Metallurgical Plant’s wire and rebar strands.

“Active sales of accumulated stockpiles led to a 24-percent increase in forgings sales compared to the previous quarter. In the third quarter, Russian wagon makers reduced their moving stock’s output just as they did in the second quarter, and so demand for various railway axles also went down. As such, Urals Stampings Plant reduced stampings sales by 44% in this reporting period.

“The three-percent decrease in electricity generation quarter-on-quarter was due to planned repairs of our power facilities’ equipment. The decrease in heat generation is of seasonal nature.”
 

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Mechel PAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@mechel.com