Mechel Supplying Coal to China Via Rail - Analyst Blog

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Russian mining company, Mechel OAO ( MTL ) announced that it has begun supplying coal concentrate to the People's Republic of China by rail through a new border checkpoint. The route from Makhalino in Russia goes to Hunchun in China. The opening ceremony for the new border checkpoint was attended by over 200 officials representing both countries.

The first 30-wagon train carrying Yakutugol Holding Company OAO's coal delivered the cargo to Chinese recipients through the new border checkpoint Makhalino (Russia) to Hunchun. The first cargo was sent earlier in Aug along the international transport corridor linking the south of Russia's Primorye Region with China's Jilin Province.

With the rail route option now available to Mechel, it can now make more timely deliveries to the customers in China. China has retained its position as the world's largest consumer of coal.

Mechel is a leading domestic steel and coal producer with a strong position in key businesses, including production of specialty steel and alloys. The company has the largest coal reserve base in Russia and is mainly focusing on growth and cost-cutting measures.

Mechel owns and controls essential infrastructure, including ports, rolling stock and power plants, which provide access to the export markets. However, Mechel is currently in a position where it could be jeopardized because of its high debt and interest burden, and might not be able to keep up with its huge capital spending program.

Mechel currently retains a short-term Zacks Rank #4 (Sell).


Other companies in the steel industry with favorable Zacks Rank are Nippon Steel & Sumitomo Metal Corp. ( NSSMY ), Ternium S.A. ( TX ) and Kobe Steel Ltd. ( KBSTY ). While Nippon Steel and Ternium maintain a Zacks Rank #1 (Strong Buy), Kobe Steel maintains a Zacks Rank #2 (Buy).



KOBE STEEL-ADR (KBSTY): Get Free Report

MECHEL OAO ADS (MTL): Free Stock Analysis Report

NIPPON STEEL CP (NSSMY): Get Free Report

TERNIUM SA-ADR (TX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Stocks

Referenced Stocks: KBSTY , MTL , NSSMY , TX

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