Mechel Down 4%, But Off Yr Lows Hit In Opening Trades; Slides On Q4 Loss, But Announces Signing Agreement With Baosteel

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Russian-based mining and steel company, Mechel OAO ( MTL ) is down 7% at $4 but is above a new year low of $3.92 hit in early Monday exchanges amid concerns about its debt levels and on reports of a much greater than expected Q4 loss due to weakness in European and Chinese cooking coal. "The firm undershot analysts' forecasts by 53% for the fourth quarter result, posting a net loss of $161 million, which compared with a profit of $201 million in the same quarter last year," Reuters reported.

MTL today announced the signing of a memorandum of understanding with Baosteel Resources Int. Co. Ltd. The memorandum stipulates that Mechel OAO, through its subsidiary Mechel Carbon Singapore will supply Baosteel Resources with up to 960,000 tonnes of coking coal annually. The price will be corrected monthly.

n addition, the memorandum allows for implementation of joint projects in mining resources on the territory of the Russian Federation, People's Republic of China and third countries. The sides will consider the possibility of cooperation on other fields as well, including the possibility of collaboration with the economic development institutes of the Russian Federation and the People's Republic of China.



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This article appears in: Investing , Commodities

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