High coking coal prices to impact gross margins of steel mills, says Ind-Ra

High coking coal prices are likely to impact gross margins of steel mills, says India Ratings and Research (Ind-Ra).

Accordingly, coking coal prices were up 5 per cent MoM and 103 per cent YoY to $222 per MT in mid-August 2021.

“Australian coking coal prices are receiving support from a strong demand from Asian countries, ex-China. The limited availability of prompt coking coal cargoes for near-term deliveries due to logistical issues, including freight and container unavailability and high freight rates, could support coking coal prices over the near term.”

“While China’s imports are from ex-Australia suppliers, these countries are not likely to be able to bridge the supply deficit, especially when the domestic consumption within these ex-Australia supplier countries is also increasing with resumption in economic activities, further restricting supply.”