BS reported that coking coal prices are set to go through the roof, pushing up valuation of assets. Coking coal contract from January is settled at USD 225 a tonne, up from the previous USD 209 a tonne, and indications are that prices for the second quarter of the financial year will hit USD 250 a tonne.
According to Mr Gerard McCloskey, chairman and founder of the McCloskey group, which specializes in data and analysis of the coal sector, there would be frenetic corporate activity in the coal space.
Mr McCloskey was speaking on the sidelines of the Steel Raw Materials conference organized by IPF Online and the Bengal Chamber of Commerce & Industry. He said that "There will be immense corporate activity pushing assets to new highs. This year, China's coking coal imports could be more than 40 million tonnes, up from 34 million tonnes last year."
For domestic steel majors, it would mean a significant cost push. Indian coking coal is of poor quality and requirements are mostly met through imports. There are some analysts reports suggesting that coking coal prices could go up to USD 350 a tonne.
Mr McCloskey, however, said that it was a bold forecast. He added that "When coking coal prices soared to USD 300 a tonne, steel prices were at USD 1000 a tonne, and steel prices are nowhere near that level.