Steelmakers tie up coking coal supplies till 2005
Some Indian steelmakers are entering into forward contracts in the international market for sourcing coking coal in the price range of $105-140/ton FOB. According to market sources, Steel Authority of India Ltd. (SAIL), India's largest buyer of coking coal in the international market, has obtained forward contracts within this price range in order to secure supplies until 2005; however SAIL officials declined to reveal the exact contract prices due to commercial reasons. Market sources also state that SAIL, being the largest buyer in India, acts as a benchmark for other Indian buyers in the international market, and accordingly it is expected that other domestic steelmakers in India will also pursue forward contracts to secure coking coal supplies in the same price range. The approximate annual consumption of coking coal in India is 25-26 million tons, of which roughly 15-16 million tons is imported. Due to severe availability shortages some Indian steel producers have had to reduce their production.