Contrary to the cohesive speculation that Coking Coal prices will remain significantly high over the long term, Sajjan Jindal, the Chairman of the diversified JSW Group, sees the prices to come down faster due to incremental supply in the offing.
In a recent tweet, he said that the resumption of idled capacities and new large capacities going on-stream will lower the prices faster than the world thinks.
An analysis of the upcoming supply scenario across the key regions reveals that supply is indeed going to get better in the future.
China has recently relaxed the 276 yearly working day rule in view of the rising coal prices due to shortage in supply. The National Development and Reform Commission of China has recently ruled that coal mines in that country should operate 330 days in a year.
In India, efforts for ramping up Coking Coal production by the Coal Ministry is going on, aimed at relieving the country’s steel makers from the pressure and volatility of Coking Coal prices in international markets.
Also, Jindal Steel and Power Limited had resumed mining operations in its coal fields in Mozambique with effect from 1Oct’16 in view of the upsurge in Coking Coal prices due to tight supply. Coking Coal, alongwith Non Coking Coal, will be produced in the fields.
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