OREANDA-NEWS. April 29, 2010. Mechel released 1Q10 operating figures that showed an 8% QoQ increase in coking coal concentrate production. In Mechel's reporting, this category now includes coking coal concentrate plus various types of coal for steel production, reported the press-centre of OTKRITIE FC.

The overall category saw volumes rise from 2.5mt in 4Q09 to 2.72mt for 1Q10. Rolled steel output has seen a 5.6% QoQ growth over the same period.

View: Since the company has shown positive QoQ dynamics, we anticipate coal output to continue growing in 2Q10 as the company signs new annual export contracts. We believe rolled steel volumes will be at the same levels as in 1Q10 because the company is operating almost at full capacity.

Valuation and Action: We reiterate our BUY rating for the stock and our target price of USD 40.5 per ADR.