Mechel Ruling is Good News, Contrary to Recent Headlines

If you have read the headlines of articles that many major market sites are putting out, you would probably think that the Russian Anti-Monopoly Service’s ruling was a negative thing for steelmaker Mechel (MTL). To name a few, here's Bloomberg's: “Mechel Told to Cut Prices Considerably After Probe”; Reuters': “Russia Punishes Mechel with Enforced Coal Price Cuts”;  and MSN Money's: “Russian Miner Found Guilty of Price Fixing".

Now these headlines are accurate, just very misleading. Yes Mechel was told to cut the prices on the coking coal it sold domestically (coking coal accounts for 8% of Mechel’s revenue), and yes Mechel was punished for its actions (about a 300 million dollar fine) – but the ruling was still very positive news for Mechel and anyone long the stock.