Press Trust of India / New Delhi Feb 19, 2009, 16:36 IST
In an effort to ease out input cost pressure, JSW Steel is negotiating a 66 per cent lower rate for coking coal from global suppliers at $100 per tonne, a top company official said.
"Long-term coking coal contracts are under negotiations. We are expecting (the deal at) close to $100 a tonne, which is 66 per cent lower than the present contracted rates," JSW Steel Vice-Chairman and MD Sajjan Jindal told PTI.
JSW Steel has already negotiated a 43 per cent cheaper rate for coking coal to be procured from global mining major Rio Tinto for the January-March quarter at $175 a tonne, against the contracted price of $305 a tonne.
Jindal said the long-term coking coal contracts for the next fiscal would ease out the company's input cost pressure, which partially ate into its margins as it reported a net loss of Rs 127.50 crore for the third quarter of 2008-09.
Selling at $96 a tonne last year, coking coal prices had touched $300 (free-on-board) a tonne under long-term contracts in the international market. Coking coal is a vital raw material in steel-making.
After touching their peak during the first-half of 2008, commodity prices including that of coking coal fell by over 60 per cent in the spot market due to the global economic crisis.
However, bound under long-term contracts, firms like SAIL and JSW Steel failed to reap the benefits of the price correction.
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