Steam coal seen soft on weak crude oil rates
04 Dec 2014
December 4: Indian companies expect steam coal prices in international markets to remain soft in the coming months on lower demand as well as a soft trend in crude oil prices.
“As and when liquid fuel prices become soft, there will be pressure on solid fuel like pet coke and steam coal,” said an official from a cement company.
Incidentally, crude oil prices declined from a high of about $106 per bbl for the Indian basket at the beginning of May to a low of less than $70 per bbl as on December 2.
“The decline in crude oil rates appears to be putting pressure on steam coal prices that too have remained soft during the past few months and are unlikely to firm up from the current levels,” the official said.
“Steam coal prices are expected to move in a narrow band as there is not much demand due to a slow growth in all the major economies of the world. A weak trend in crude oil is also affecting coal prices,” said another official.
According to a compilation by ICMW, the price of South African standard coal fell to $66 per ton FOB as on December 3 from a high of $77 per ton FOB as on May 3 this year.
Similarly, prices of coals of other origin too have softened even as the decline in petcoke prices is not that steep.
The price of high sulphur pet coke (US Gulf) has actually firmed up by around $4 per ton during the same period from a low of $54 per ton to $58 per ton.