Mechel Declines on Concern European Slowdown to Cut Coal Demand
OAO Mechel (MTLR), Russia’s largest producer of coal for steelmakers, fell the most in a week as the European economic slowdown stoked concern demand for the commodity will deteriorate.
Mechel slid 2.1 percent to 255 rubles by 4:07 p.m., the biggest one-day drop since April 23. The stock declined as much as 2.3 percent earlier.
The jobless rate in the 17-nation euro area increased to 10.9 percent in March from 10.8 percent in February, the European Union statistics office in Luxembourg said today. That’s the highest since April 1997, according to Bloomberg News data. Separate reports showed euro-area manufacturing contracted more than initially estimated in April and unemployment in Germany, the region’s largest economy, unexpectedly increased.
Europe is Mechel’s second-largest market, accounting for 19 percent of its revenue in 2010, data compiled by Bloomberg show.
Mechel has retreated 5.8 percent this year and trades at 4.4 times estimated earnings. Consol Energy Inc. (CNX), the third- largest U.S. coal producer and a member of the S&P 500’s coal and consumable fuel sub-industry index, trades for 17.2 times estimated earnings, while the ratio for Peabody Energy Corp. (BTU), the largest U.S. producer of the commodity, is 10.6.
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