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Mechel reports positive 3Q 2009 operating results

By Vladimir Sergievskiy (Finam)

On 26 October 2009, Mechel (RTS: MTLR) published its operating report for 3Q 2009. The company reported a surge in output of almost all product types compared with the previous quarter. The most efficient segments were coking coal, output up 109%, and the ferrochrome segment, where production jumped 91%.

Management commented on the operating report and noted specifically that capacity load at Mechel production sites was rising faster than had been expected. At present, the company’s mining segment runs at 75-80% capacity, and the steel segment operates at almost full capacity. In addition, the report reflects record operating indicators of Korshunovsky GOK and some of the Southern Kuzbass Coal Company subdivisions.

In general, we are upbeat on the 3Q 2009 operating report from Mechel, but note that it has come as no surprise for the market as the company repeatedly voiced the increase in capacity load in July-September.