Low demand from China pressurized Coking Coal prices to decline which is extending room for other buyers to buy Coal at low level.
International economic downturn has swallowed steel industry sales and prompted to slow down their production. Very competitive market incited industries to cautiously move on for raw material purchasing, which is visible in terms of drastic drop in Iron ore and Coking Coal prices during last couple of months. CFR China Iron ore prices declined to almost 15%, whereas Coking Coal prices slumped to 29% on a yearly comparison.
Australian Hard Coking Coal prices were at around USD 153-154/MT FOB about a year ago and now it is trading at around USD 108-109/MT. Due to weak demand, Coal prices have plunged during the time. Coking Coal importers like Japan, Korea, India and other are ripping the benefit of low Coal prices.
Indian major steel players are booking their quantity at low prices. It is noted from industry veterans that Tata Steel and SAIL negotiates to book their quarterly requirements at USD 125-126/MT from Australia & USA.
Low prices of Coking Coal & Iron ore will help Indian steel manufacturers to minimize the production cost and increase profits at the time of demand from Industry. Also, a fall in Coking Coal prices by 29% will encourage steel producers to inch up their sales in the competitive market. However, market experts believe that buyers are waiting for elections to complete and are positive over post election buying.
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