LONDON (ShareCast) - British mining services company Hargreaves Services said its Monckton division was facing volatile trading in the steel industry but reported group trading in line with hopes.

Hargreaves said the coke production plant near Barnsley in Yorkshire, which produces some 200,000 tonnes a year for heating and use in glass, detergents and steel-making, was in talks with customers about contracts for 2014.

Some customers were seeking to minimise levels of off-take and commitment through quarterly contracts, it said.

There were also delays in re-starting a number of its newly acquired Scottish surface mining sites, but six sites were now operating with the prospect of starting on two further sites in the next few weeks, which will bring activities in line with plan.

In Germany, challenging steel markets depressed coke volumes and margins in the first half of the year, although it said it had some confidence that the German operation would have a strong second half.

Its core material handling business faced some delays in key contract awards. "Progress has however been made in this area and the resulting outlook for trading in the second half is positive," it said.

It said its transport division had a very strong first half and was trading ahead of management's expectations.

Hargreaves said the group as a whole was trading in line with management's expectations and was well placed to deliver a good second half performance.

PW

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