Thursday, April 21,
The global war between miners and steelmakers, which pushed up coking coal prices by 52%, has put Indian steel companies in a dilemma.*
Steelmakers may not be able to raise prices due to resistance from users and they could instead explore options of production cuts to protect margins, said people connected with pricing strategies at steel firms.
Recent negotiations of mining giants with Japanese steel mills, has landed the April price for coking coal at $330/MT globally. BHP, which controls 50% of the coal market worldwide, offered variable pricing options to push for a monthly contract in place of quarterly. To avoid the monthly pacts, the Japanese steel mills turned to other players like Rio and accepted higher prices.
But this may not result in a steel price hike in India immediately. Slow demand from users such as auto, consumer goods and the building sectors, due to restricted availability of finance, could lead major domestic players such as Tata Steel, SAIL, JSW Steel and Essar Steel to maintain current prices till April end.
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