BS Reporter / Kolkata
The prices of coking coal, which accounts for 50% of the raw material cost for steel producers, are expected to go up by over 200% in the current fiscal.
Industry sources said Posco, the world’s fourth largest steelmaker, has just settled contracts at prices 205-210% higher than the previous level of $98 per tonne.
Posco’s contract with Australian miners, effective April 1, would hold good for Indian steel producers importing coking coal primarily from
C G Patel, director (commercial), Rashtriya Ispat Nigam (RINL), said the last contract price was between $94-98 per tonne, which implies that increase in prices is to the tune of Rs 8,000 per tonne for domestic producers.
"Add to it an increase in ocean freight rate by $25-$35 per tonne, and the increase in cost would be close to Rs 9,000 per tonne," he added.
RINL has no captive mines and imports its entire coking coal requirements from
Industry sources pointed out that the cost increase being calculated had not factored in the iron ore contracts, which were imminent. "The cost push on account of coking coal is over and above the Rs 6,000 per tonne cost, which has not been recovered by the industry," said sources. Iron ore accounts for 35-40% of the cost of steel production.
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