There is a lot of drama going on at Mechel (MTL) right now, and I don't like drama. On top of my findings from this weekend (Mechel Profits Appear to Be Coming Under Scrutiny) was yesterday's news that (without an analyst report to read over) in my eyes looked like Mechel succumbing to the government pressure and "concluding long term contracts" with Russian steelmakers. In my eyes that means - lower profits and forced to stay in the domestic market as opposed to selling their coal in the global marketplace. I could be wrong but without access to an analyst who follows the company week in and week out that is how I read it.

• Mechel OAO (NYSE: MTL - News), one of the leading Russian mining and metals companies, announces that it has concluded long term contracts to supply coking coal to a number of Russian customers and expects to secure additional contracts in the future.
• Mechel has concluded agreements on supplying coking coal to major Russian steel plants for a fixed price for the third quarter of this year. Signing such agreements increases the transparency and predictability of the market, and has benefits for both coking coal producers and consumers. Currently, Mechel is considering the possibility of concluding even longer term contracts on the domestic market.

Even worse is that last sentence. Not only are they beholden for the next quarter they are "considering" even longer term contracts on the domestic market. Again, this has the hands of the government all over it and hurts profitability in my eyes. I don't know the terms of said contracts but I can only conclude they are lower than the open market prices.