Coking coal contract prices have dipped in the current
quarter. Currently, the contract price of hard coking coal is $235/MT, or about
Rs 11,750/MT. This is almost 20% lower than what the price was during the
October-December 2011 quarter and 5% higher than last year's price.
Though India is among the four largest producers of steel
globally, local manufacturers rely heavily on imported coal to meet their
requirements. The price of Australian coking coal rose from close to $225/mt
last year to a high of $315 during July-September quarter.
SAIL, one of the biggest importers of coking coal among the integrated steel
makers, is expected to increase its imports to about 14.3 mt in 2012-13 from
about 11.7 mt at present, according to reports. It imports two- thirds of its
total raw material requirement.
Speaking about the Australia's mining tax, CS Verma,
Chairman of SAIL said, “It is understood that the MRRT has been passed by the
Australian Parliament. There is an overall resentment among the leading mining
companies of iron ore and coal, as it may affect their cost and profitability.
We are examining the impact of this legislation on our imports from Australia”.
Seshagiri Rao, joint managing director, JSW Steel also
expressed his view on this and said, “This is a tax on profit, not on cost. The
Australian government has also included some reductions as part of the policy.
So, I don't think the levy can be passed on. Also, since there has been a
reduction in dependence on Australian coal, it is unlikely there will be
efforts to raise any cost parameters”.
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