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Coal Prices

In: Business and Management

Submitted By RKSIIMB
Words 615
Pages 3
(Reuters) - Indian coal imports are expected to rise in the financial year through March 2013 as more end-users turn overseas, prompted by a narrowing gap between the domestic and international prices of thermal coal.
Excess supply has hammered international thermal coal prices in recent months, with top exporter Indonesia cutting its output forecast to around 360 million tonnes from 390 million to 400 million for 2012.
Based on the current global supply and demand picture, end-users expect thermal coal prices to remain well below $100 a tonne for the next 10 to 12 months.
"International thermal coal prices have almost hit the bottom," said Vinod K. Singh, adviser to global chemical and textile company GHCL (GHCH.NS), which is also a leading producer of soda ash.
Coal of the grade 6,000 kcal/kg on a Net As Received basis now costs $88 to $89 a tonne free-on-board (FOB), for example, Singh said. "We do not expect it to go down any further."
India's coal supply is expected to fall short of demand by 192 million tonnes in the fiscal year to March 2013, a coal ministry official said.
Coal demand in India, which has the world's fifth-largest coal reserves and produces the most after China and the United States, is seen at around 772 million tonnes against an expected supply of about 580 million in the financial year to March 2013.
"More and more consumers are looking at imports from mainly Indonesia and Mozambique to fulfil at least 50 to 60 percent of their thermal coal demand," said V.R. Sharma, chief executive and deputy managing director of the steel business at Jindal Steel and Power Limited (JNSP.NS) (JSPL).
"The balance 40 to 50 percent they source from India. Then they blend these and use. We are one of them," Sharma said.
The cheapest domestic coal price or the notified price available from Coal India Ltd (COAL.NS) is around 1,600 rupees per tonne for...

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