Bloomberg News

Evraz Group, Mechel, Raspadskaya Plunge on Falling Coal Prices

September 29, 2008

Evraz Group SA, OAO Mechel (MTL:US), and OAO Raspadskaya, three of Russia's biggest coal producers, plunged as a drop in prices raised concern that the companies' earnings growth will slow.

Moscow-based Evraz declined $10.49, or 22 percent, at 3:19 p.m. in London trading, the biggest drop in nine months. Mechel (MTLR) fell $3.51, or 17 percent, to $17.21 at 10:25 a.m. in New York. Raspadskaya fell 8.25 rubles (33 U.S. cents), or 6.6 percent, to 116.74 rubles at the close in Moscow.

``It has to do with them being expensive on a price-to- earnings basis relative to a lot of other stocks in the long run,'' said Michael Teagarden, a sales trader with UBS AG in Moscow. ``People are also concerned about the earnings going down since there are obvious problems building things right now and this could affect steel prices.''

Benchmark European coal derivatives fell for a fifth consecutive session to an almost two-week low. The Baltic Dry Index (BDIY), a measure of shipping costs for commodities, declined for a sixth session to more than a two-year low.

Evraz, which produces all the coal for its steelmaking business, owns 40 percent of Raspadskaya.

To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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Companies Mentioned

  • MTL
    (Mechel)
    • $1.94 USD
    • -0.05
    • -2.58%
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