Coal news and updates

Q4 coking coal contracts to be headed southwards

September 16: Fourth quarter coking coal contracts would be on a downward trend, ICMW has learnt.

Arti Luniya, Executive Director, Coal Import Group, Steel Authority of India, speaking to ICMW on the sidelines of the 8th Indian Coal Markets Conference in Kolkata, organised by mjunction services limited, HIS McCloskey and the Coal Consumers’ Association of India (CCAI), said: “Suffice it to say that Q4 coking coal contracts will be on a downward trend,” declining to put any figure to her predictions.

It may be recalled that India’s steel mills had settled the third quarter (Q3) July-September contracts for coking coal at $120 per ton.

At SAIL, the coking coal requirement is 12 million tons (mt) per annum and this is set to go up once SAIL completes its capacity expansion to 23.5 mt. The PSU sources the fuel mainly from Australia, the US and New Zealand.

“SAIL’s capacity is set to increase by 8 mt. On an average 700 kg of coking coal is required per 1 mt of steel. So, In tandem, its coking coal requirement will also go up,” Luniya said.

Coal pricing is an important issue and the market has seen tremendous volatility in the past with prices coming down from $300-$350 per ton levels to $105-$110 FOB.

However, Luniya noted that there has been a relative stability in the price levels in the last 5-6 months because of a few crucial factors. These include the downward shift in the steel industry with the cost cover coming down and closure of mines.