Mechel Increases Sales of Rail Products in 2020

Mechel increased sales of rail products in 2020

Rails of different types are produced at two enterprises of the metallurgical division of Mechel Group: the Chelyabinsk Metallurgical Plant (railway and pointed rails) and the Izhstal plant ( contact rails for subways). Most of the rails were shipped to the Russian Railways - 234 thousand tons. The rest of the volume, about 70 thousand tons of products, was sent to other Russian customers and consumers in foreign countries.

ChMK last year shipped 8% more rail products than a year earlier. The growth of export sales of ChMK rails compared to 2019 was 74%. Expanded the geography of export deliveries, ChMK rails were sent to Georgia and Latin America for the first time.

Apart from Russian Railways, significant consumers of rail products are Mosinzhproekt JSC and Moscow Metro State Unitary Enterprise, where it is used both for routine repairs and for the construction of new subway lines. In total, over the previous period, Mechel Group enterprises supplied over 87 thousand tons of rail products for the construction of new and repair of existing metro lines in the capital region: these are main rails P65 and P50 manufactured by Chelyabinsk Metallurgical Plant and contact rails manufactured by Izhstal.

The volume of sales of contact rails by the Izhstal plant is 27% higher than in 2019. In 2020, Izhstal carried out a voluntary certification of a contact rail, which increases the competitiveness of its products, allows us to expand its client portfolio and supply products, including to the CIS countries.

“Since the start of production of rails at the ChMK rail and structural mill, we shipped more than 1.5 million tons of rail products to domestic and foreign partners. Our rails are involved in all significant infrastructure railway projects in Russia. In the near future, it is planned to master the production of new types of rails at the Chelyabinsk site, which will expand our product line, ”commented Andrey Ponomarev, General Director of Mechel-Steel Management Company LLC.

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Mechel PAO Ekaterina Videman Tel .: [email protected]

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Mechel is a global mining and metallurgical company. The company's products are supplied to Europe, Asia, North and South America, Africa. Mechel unites producers of coal, iron ore, steel, rolled products, ferroalloys, heat and electricity. All businesses operate in a single production chain: from raw materials to high value-added products.

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Certain statements in this press release may contain assumptions or forecasts regarding future events or the future financial performance of Mechel PAO in accordance with the provisions of the 1995 US Securities Litigation Reform Act. We would like to warn you that these statements are only assumptions and the actual course of events or results may differ materially from those stated. We do not intend to revise or update these statements. We refer you to the documents that Mechel periodically submits to the US Securities and Exchange Commission, including the Annual Report on Form 20-F. These documents contain and describe important factors, including those identified in the "Risk Factors" section and "Note on the forecasts contained in this document" in Form 20-F. These factors could cause material differences between actual results and our assumptions and forecasts regarding upcoming events, including but not limited to achieving the anticipated level of profitability, growth, cost and efficiency of our recent acquisitions, the impact of competitive pricing, the ability to obtain the necessary regulatory approvals and confirmations. the state of the Russian economy, the political and legal environment, volatility of stock markets or the value of our shares or ADRs, financial risk management and the impact of the general business situation and global economic conditions.