SAIL sales decrease due to coking coal shortage
According to recent news in the market, sales of Indian steel producer Steel Authority of India Ltd (SAIL) has decreased by 15-20% in the first quarter of 2004-05 fiscal due to coking coal shortage. Accordingly, SAIL decreased its sales target for 2004-05 fiscal from 12 million tons to 11.5 million tons. Moreover, as SAIL's Australian partners have increased coking coal prices, SAIL will have to pay 20% more for the subject raw material under the long-term agreement signed with Australian companies, including BHP Billiton and Anglo Coal of Australia. However, SAIL does not adjust its prices in line with costs but in line with market situation. Therefore, despite the increase in input cost, SAIL is not expected to increase product prices in short term. SAIL meets 65% of its total coking coal requirement from imports. Total coking coal requirement of SAIL is expected to amount 13 million tons.