Thursday, October 14,
India’s demand for coking coal is expected to boost global prices for the next seven to eight years, driving acquisitions from the U.S. to Australia.
“Everybody in India right from Government-owned steel mills to private players is looking to acquire coking coal mines abroad,” said, Arun Kumar Jagatramka, chairman of Gujarat NRE Coke Ltd.
Growing steel production in India will increase demand for coking coal and imports of the raw material into India will be more than double to 56.5 million metric tons by 2015, according to Morgan Stanley.
The key steelmaking ingredient may climb to a range of $200 to $220 a ton, Jagatramka said. Contract prices for coking coal have settled at $209 a ton for the December quarter, according to Macquarie Group Ltd. Prices are expected to average $191 a metric ton this year, up 48 percent from last year, Morgan Stanley analyst Peter Richardson said in an Oct. 6 report.
China last year imported a record quantity of coking coal, and India almost doubled purchases of energy coal for its power stations to 60 million tons. Adani Enterprises Ltd., India’s biggest coal importer, in August agreed to buy an Australian coal project for A$3 billion ($2.9 billion).
“Given the readiness, you could see at least 10 or 20 companies from India following Adani,” Jagatramka said. “Indian steel and mining companies are well capitalized, with one or two consortiums there which have more than $2 billion or $3 billion in their kitty,” he said, naming Coal India Ltd. as a potential acquirer.
Source: Bloomberg
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