Chinese ban on Australian coking coal to benefit Indian steel makers
The Chinese ban on Australian coking coal is expected to benefit Indian steel makers such as Tata Steel and JSW as the input raw material cost would remain low in the near term and boost domestic production.
The cost of production for India’s steel producers using the blast furnace route would remain contained in the near term, supported by the negative bias on coking coal prices because of China’s ban on Australian coking coal.
Softer coking coal prices shall directly support EBITDA/tonne accretion of around Rs 2,600 over 2020-21 for companies using the blast furnace route, India Ratingsand Research (Ind-Ra) said in a research report. EBIDTA stands for earning before interest, depreciation, tax and amortisation.
