Russian coal and steel group OAO Mechel (MTL) said Thursday it produced 1.397 million metric tons of steel in the second quarter 2009, down 6.7% from 1.498 million tons in the same period in 2008, but up 27% from 1.100 million tons produced in the first quarter 2009.

The company said second quarter coal production was 2.991 million tons, down 56% from the same period of 2008, and down 13% from the previous quarter.

Mechel's nickel production for the quarter stood at 4,200 tons down 11% from the same period of 2008, but up 44% from the previous quarter.

"Starting from the second quarter we observe certain positive dynamics in the markets of steel products we produce," Vladimir Polin, senior vice-president of Mechel said in a statement, adding the company has a positive outlook for the second half 2009 and intends to "increase production, tapping new market niches and increasing the company's share" in its markets.

-By Alexander Kolyandr, Dow Jones Newswires; +44 20 7842 9410; alexander.kolyandr@dowjones.com