OAO Mechel dropped the most in four weeks on concern Russia’s largest producer of coal for steelmaking will lose revenue after halting mines at its Bluestone complex in the U.S.
Mechel retreated 3.9 percent to 211.50 rubles by the close in Moscow, the biggest decline since Sept. 26. The volume of shares traded was 1.1 million, equivalent to about 94 percent of the three-month daily average. The stock fell as much as 4.4 percent earlier.
Mechel temporarily suspended mining at some facilities of its Bluestone mining complex, including Keystone, Justice Energy and Dynamic Energy, citing “accumulated” coal inventories, the company said in a statement yesterday. The coal miner expects operations to resume in two to three months, according to the statement.
“The explanation for the move is weak demand coupled with rising unsold inventory,” Alfa Bank analysts led by Barry Ehrlich, said in an e-mailed report. “We see the news as negative.” The halt may result in about $120 million in lost revenue, Alfa Bank said.
Mechel has slumped 22 percent this year and trades at 11 times estimated earnings, compared with 13 times for BHP Billiton Ltd., the world’s largest mining company. Mechel’s American depositary receipts lost 0.9 percent to $6.92 yesterday.