Indian steel companies show trends of increasing coking coal imports as better supplies have helped ease prices. The steel makers want to sign contracts quickly at prevailing rates, expecting future price surge, said analysts and traders.
In international markets, coking coal prices have come down by $10-$15 per tonne to $220 a tonne as supplies from Australia, the biggest producer, improved recently after miners there have restarted operation after sorting out labour strike and other problems.
“Indian steel makers want to sign long term contracts at current prices as they believe coking coal prices are set to rise again in future. By this, the steel manufacturers can have an edge as far as input cost is concerned,” said Aurobindo Prasad Gayan, chief commodity and currency analyst with Karvy Comtrade.
During April and May, Indian ports received coking coal cargo of about 4.8 million tonne, 15 per cent lower than 5.7 milion tonne imported in the previous comparable period. However, sources said, the imports went up in May from April, soon after the international prices slipped.
“Our April import was 37,000 tonne but in May we imported 97,000 tonne coking coal for Bokaro and Rourkela plant,” said Laxman Bhujbal, deputy manager (imports ) of Steel Authority of India Ltd (SAIL), based at Paradip.
Similarly, Nilachal Ispat, which had ordered one vessel of coking coal in April, bought two vessels of Australian coking coal in May, company sources said.
“Companies such as NTPC and SAIL have already hinted about increasing their coking coal imports by around 15 percent this year. Besides Australia, they are also eying South African mines to meet their requirement,” said Gayan.
India imports about 30 million tonne coking coal every year, mainly from Australia, Indonesia and recently, from South Africa to meet the demand of its ever-rising steel industry and to feed the limited demand seen in power sector. Several industry bodies have forecast that 2012-13 imports would top 35 million tonne on better demand expected in the October-December quarter.
“Indian importers did not really benefit by the price decline of coking coal as rupee fall made the dollar costlier. But we had to place orders based on our long term contract and projections of steel demand in India,” said a top official of a steel maker.