India mulls steel price hike due to more expensive coal

Rising coal prices, coupled with shortages of coking coal and thermal coal, are forcing Indian steel makers to consider raising steel prices in the next quarter. Indian steel giants such as JSW Steel and Jindal Steel and Power (JSPL) expect prices to rise due to costs.

India's coking coal imports in September fell 26.18% to 3.21 million tonnes, while imports of iron ore fell 35% to 2.32 million tonnes. The fall in coking coal imports amid skyrocketing prices, coupled with the expected increase in steel demand during the Indian holiday seasons, indicates a rise in steel prices in the coming period.

“The steel giant, which relies heavily on imported thermal and coking coal, believes that sea prices are likely to remain high for another quarter or two,” JSW Steel's marketing director Jayant Acharya told local media.

“Coal has an impact on costs and it will have to do with steel prices over the next few quarters,” he adds. "Base steam coal prices have more than doubled since the beginning of the year to over $ 200 per tonne, and have surged in the last few weeks due to global supply cuts."

Most of the steel mills in India depend on thermal coal supplies to meet their electricity needs. According to the JSPL, due to supply problems, steam coal prices have quadrupled their usual pace.

“A ton of coal, which was in the range of INR 4,000-6,000 per tonne (US $ 53.40-80.10 per tonne), is now worth INR 8,000-12,000 per tonne,” JSPL's managing director told the media. V.R.Sharma.

“Steel in India is currently in the range of INR 50,000 to INR 55,000 per tonne. The shortage of coal has led to an increase in coal prices, which will affect steel, which may also rise due to this unprecedented growth, ”concluded Sharma.