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| Edited By: Sumit Moitra |Source: DNA |Updated: Mar 18, 2018, 03:03 AM IST
Gujarat NRE Coke, the largest independent producer of metallurgical coke in India with an installed capacity of 1.43 million tonne (mt) a year, expects coking coal prices to settle at $315 a tonne for July-September.
The price, though lower than previous quarter’s level of a high $350 when floods in Australia created panic among buyers, shows a fundamental strength on the back of improved demand from steelmakers, managing director Arun Jagatramka said.
“After the first quarter (April-June) price settled higher at $350 mainly due to the flood in Queensland, we expected it to come down to $250-$260 for the second quarter considering that prices were ruling at $225 a year back. But Australian producer like Anglo-American Plc has just settled for $315 with some customers, which we think is very high compared with what we had expected,” Jagatramka said.
Prices of metallurgical coke, which are currently hovering at $540 a tonne, has a direct correlation with its raw material, coking coal.
While most of the global steel makers are yet to accept the $315 price, Jagatramka is of the view that customers don’t have a much choice but to accept the price at which Anglo-American has settled its supplies.
“The global coking coal market is highly consolidated with the top five producers controlling 90% of the supplies,” Jagatramka told reporters on the sidelines of an extra-ordinary meeting of shareholders of Gujarat NRE Mineral Resources Ltd.
Gujarat NRE Coke, which currently produces 1.43 million tonne of met coke, is taking its output to 4 mtpa by 2014-15 by adding 1 million tonne in Gujarat and another 1.5 million tonne in Andhra Pradesh.
Volatile market conditions has forced Gujarat NRE not to go for any immediate fundraising for its expansion plans though the company in November took shareholders’ approval to raise about Rs1,000 crore through various methods including foreign currency convertible bonds, he said.
Jagatramka has also temporarily shelved IPO plans for holding outfit, Gujarat NRE Mineral Resources Ltd.
