Comments
The Indian steel makers may have to pay more for the imported coking coal in the next quarter beginning July 1.
Steel industry insiders told Business Line that the forthcoming quarterly contracts, which would be finalised by the third week of this month, could see upward price revision. The last revision saw 47 per cent jump.
Indian steel companies largely source coking coal from Australia, where the strikes by the BHP Billiton coal miners from Tuesday provided a fresh trigger for a potential coking coal supply disruption and hardening of prices.
Industry sources said about 3,500 mine workers were participating in a rolling six-hour work stoppage on Tuesday and Thursday as also on June 18 at different sites of BHP Billiton Misubishi Alliance (BMA) in Bowen Basin of Queensland, known for its prime hard coking coal.
The current quarterly contracts price of $330 a tonne has been overtaken by the spot price around $334 a tonne. Some Indian importers will have to fall back upon the spot market for want of supplies of contracted deliveries.
BHP, Rio Tinto and Xstrata have already told their customers, including those in India, that they might miss deliveries because of disruption in operations owing to the floods.
According commodity analysts, the spot price has been inching up in the past few days on apprehension of a possible industrial unrest by miners in Australia. An analyst with a foreign bank said that miners' agitation in Australia, the biggest exporter of coking coal for India and China, would top the current supply shortage after floods in Queensland mines earlier.
BMA has 100 overseas customers. Until recently many of the Queensland mines were under force maejure , a legal provision for suspending supply obligation due factors beyond the control of a seller.
According to Mr Kishor Ostwal, CMD CNI Research, the coking coal supplies to local steel majors, heavily dependant on Australia, are likely to be affected further in view of the strike.
“This could impact the earnings of the likes of SAIL and JSW Steel in the current quarter itself,” he added.
He said SAIL imports 70 per cent of its coking coal requirement, most from Australia. JSW Steel would also remain dependant on Australian imports this year.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.