Page 180 - RusRPTSept21

among the best-paying dividend names due to high steel prices.
However, Russian steel names came under heavy regulatory pressure. The FAS watchdog suspected price collusion among the largest metals producers and the government introduced a one-off export duty to skim the excess profits on large prices.
NLMK will now cut flat steel prices for hot rolled coil (HRC) steel by 7.5%, 4% for galvanized steel and a further reduction of 4.3% for steel rebar after having reduced the prices already.
"The price cuts in part reflect the imposition of a 15% export duty on Russian steel from August 1, which is pressuring profitability of export sales and making domestic price cuts viable," BCS GM commented.
Nevertheless, the analysts expect some rebound in export steel prices in the next couple of months, which should support domestic prices as well. BCS GM still sees the pressure on prices as short-term negative.
The Federal Antimonopoly Services (FAS) will check Novolipetsk Mining Kombinat (NLMK) and other rebar manufacturers for collusion. Interfax reported, citing the Federal Antimonopoly Service (FAS) statement. Based on the results of price monitoring on the rebar market, the agency discovered signs of a possible collusive behavior among the largest rebar producers. In this regard, FAS of Russia conducts unscheduled on-site inspections of NLMK, Novostal-M, Tulachermet-Stal and PMH Management Company. Of note, the agency will make final conclusions on the presence of violations after verification activities and analysis of all available information.
Mechel released 2Q21 Operating Results. The company’s total coal and steel sales rose by c17% and c21% q/q, respectively.
· Total raw coal production was up 12% q/q, but down 35% y/y to 2.96mt
· Coking coal concentrate sales surged 71% q/q to 1.5mt, as mining of this type of coal was improved and prioritized in order to benefit from favorable market conditions – down 8% y/y
· PCI sales grew by 27% q/q to 322kt, as shipments to Japanese and South Korean customers increased – 38% lower y/y
· Anthracite sales were down slightly by 4% q/q to 347kt (up 22% y/y)
· Steam coal sales shrank 27% q/q and y/y to 716kt. The company’s management decided to cut down on thermal coal mining in 2Q21, prioritizing coking coals to benefit from favorable market trends
180 RUSSIA Country Report September 2021 www.intellinews.com