Coking Coal Prices fall by upto USD 35/MT Y-o-Y

Coking Coal prices in Q1 FY15 have declined by 22% compared to same period of FY14.

Continuous decline in Coking Coal prices have provided relief to steelmakers in the country, which are totally dependent on imported Coking Coal for steel production.

Total crude steel production in the country reached around 81 MnT in FY14, out of which 60% steel comes from blast furnaces route as it utilizes around 34-35 MnT of Coking Coal to operate plants frequently. India’s total requirement of Coking Coal is fulfilled by imports.

As per the analysis by SteelMint, India had imported around 39 MnT of Coking Coal in FY14; out of which 87% was consumed by blast furnaces and the rest 13% used by the others. Persistent fall in Coking Coal prices have been provided a big relief to blast furnace manufactures, who imports Coking Coal for steel production.

Indian steel giants SAIL, JSW Steel, Tata Steel and RINL, which rely on imports and operating through blast furnace route, are sourcing a huge amount of Coking Coal every year. SAIL had imported around 11.2 MnT of Coking Coal to produce 13.5 MnT of crude steel in FY14.

Qty in MnT

Source: SteelMint Research

Trade prices of Coking Coal in Q1 FY14 were at around USD 144-145/MT FOB. However, it is offered at USD 112/MT FOB in Q1 FY15 – witnessing a sequential decline of 20%. 

Continuous decline in Coking Coal costs coupled with elevated Iron ore prices (owing to supply shortage) enables steel industry to balance operating margin in production.