Russian miner OAO Mechel (MTLR.RS) Monday said its first-quarter steel output was down 30% from the same period a year ago to 1.1 million metric tons, while its coal production more than halved from a year earlier to 3.43 million metric tons due to a drop in global demand.

Steel production in the first quarter was down 5% from the last quarter of 2008, while the company's peers OAO Novolipetsk Iron & Steel (NLMK.RS) and OAO Magnitogorsk Iron & Steel Works (MAGN.RS) both posted an increase from the fourth quarter of 2008.

KIT Finance, which called Mechel's production results "very unimpressive", said the company's exposure to construction demand, which is "unlikely to recover soon", seems to be the reason for the weak results.

The company said coking coal output fell 76% on the year and 63% on the quarter to 1.02 million tons, while production of steam coal fell 19% both on the year and on the quarter, to 2.40 million tons.

OAO Raspadskaya (RASP.RS) said on April 15 that its coking coal production was up 36% in the first quarter from the last quarter of 2008.

"Mechel's relatively aggressive pricing policies last year might be the reason," KIT Finance said, adding that with lower steel production, coking coal consumers obtained much more freedom in choosing suppliers.

Shares in Mechel closed flat in Moscow at $6.05.

Company Web site: www.mechel.com

-By Jacob Gronholt-Pedersen and Alexander Kolyandr, Dow Jones Newswires; +7 495 937 8445; jacob.pedersen@dowjones.com