Australia coking coal price hike to impact domestic steel cos

A sharp rise in coking coal prices in Australia will increase the cost pressure for steel manufacturers in India and result in higher steel prices in India, Care Ratings said today.
"The steel companies in India do import coking coal from Australia. Thus, the sharp rise in prices will increase the cost pressure for producers, in turn, leading to a rise in steel prices," it said.
Cyclone Debbie that disrupted major mines and ports in Australia towards March-end pushed up the prices of coking coal as it distorted coking coal exports from Australia.
The cyclone affected shipments from Queensland, producer of more than 50 per cent of the world's seaborne coking coal.

India majorly imports coking coal for manufacturing of steel (around 70 per cent) and an increase in the input cost will very likely result in rise in steel prices in India.
The major raw materials used for the manufacturing of steel are coking coal and iron ore. While the demand for iron ore is majorly met domestically, coking coal is largely imported for manufacturing of steel. Around 70 per cent of coking coal requirements is fulfilled through imports.
Care Ratings said that as per media reports, coking coal prices have jumped to USD 150-180 per tonne. This implies a surge of around 86-124 per cent compared to the average coal prices of USD 80.6 per tonne in Australia in March 2017.

On Y-o-Y basis, the prices more than doubled compared to average coking coal prices in Australia that stood at USD 50.8 per tonne in April 2016, it said.