Russian steel and coking coal producer Mechel is predicting higher coking coal prices next year after reporting a rise in domestic contract prices for the fourth quarter of 2010, lifting its share price.
Mr Boris Nikishichev head of Mechel''s mining division during a conference call said that "Our forecast for 2011 as far as coking coal prices are concerned is that prices should grow by 20% to 25%.”
He also said fourth quarter domestic contract prices were up 10% on the previous quarter.
Mr Dmitry Smolin Uralsib analyst said the company''s comments on fourth quarter domestic coking coal contract prices also cheered the market. He said that "Despite the 7% decline in international coking coal prices, in Russia domestic coking coal is up by 10%.”
Steel makers in Russia, the world''s third largest producer, are benefitting from their position as leading low cost producers after suffering a difficult 2009 as global steel demand declined.