4 Jul 2018 16:03

Mechel extends contract with Baosteel until 2019

MOSCOW. July 4 (Interfax) - Mechel has extended a coal supply agreement with Baosteel Resources, part of China Baowu Steel, the company said.

The new agreement will be valid from July 2018 to June 2019 during which Mechel will supply Baosteel with up to 700,000 tonnes of premium-grade coking coal. The contract stipulates that a significant portion of this coal - up to 40,000 tonnes per month - will be supplied by Yakutugol. The price will be determined on a monthly basis.

"Russian coking coal accounts for around 7% of Chinese imports. Mechel is the chief Russian supplier of high-quality coking coal to China, we shipped two million tonnes of coking coal to our Chinese clients in 2017," Mechel chief Oleg Korzhov said.

In April Mechel concluded a contract with Baosteel for 960,000 tonnes of premium-grade coking coal, produced in Southern Yakutia, through to March 2018. These volumes are in line with agreements closed in 2016. Shipments are conducted via the Mechel owned port of Posyet.

Of total coking coal sales to third parties, Mechel shipped 15% to Baosteel in 2016.