India to push up coking coal prices

The price of coking coal, used in steelmaking, may jump 22 per cent next year because of the rising demand from India and congestion at Australian ports, according to Goldman Sachs.

The contract prices for coking coal may rise to $120 a metric tonne for the year starting April 1 next, from $98 this year, analysts led by Malcolm Southwood said in a report yesterday.

Steel Authority of India, the nation's biggest state-run steelmaker is planning to import 14 per cent more coal, as it increases production to meet the rising demand from construction companies and carmakers. India is the world's third largest importer of coking coal, Goldman Sachs said.

"With no evidence of any slowdown in the demand and no quick fix to the logistical bottlenecks afflicting suppliers,'' the analysts said, "We believe the market will remain in bulk upgrade mode.'' India could increase the coking coal imports to 25 million tonnes this year, up from 21 million tonnes in 2006, Goldman said. Australia, the world's largest exporter of coking coal, is likely to lower exports this year due to congestion at its Dalrymple Bay port in Queensland state.