Friday, July 01,
Short supply of coking coal will always support the prices of steel. Requirement of coking coal will go up on a year on year basis because it is an important ingredient for production of steel.
Prices of hard coking coal have moved up to reach about$300/MT from about $200/MT a year ago because of logistical bottlenecks and tighter supply due to floods in Australia earlier this year. If prices will go up further then buyers will start buying substitutes such as semi-soft coal or other qualities of coal but lower grade coal will affect the production process.
Tata Europe has 10%-12% self-sufficiency in raw materials. The it imports certain amount of coking coal but it is already self sufficient in iron ore. It buys coking coal on a mix of annual and quarterly pricing basis depending on the supplier.
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