Indian coking coal importers rush to take advantage of slump in offer price

Indian imports of coking coal have risen sharply and there has been a rush to book shipments in the spot markets following offers of $164-170/mt FOB for ex-Australia hard coking coal (HCC) reported from ports in Chennai, Vishakhapatnam and Paradip, traders said on Wednesday, August 29.
 
"Imported HCC still has a short-term downside of 5-8 percent since destocking at Chinese ports is yet to run its course," a Kolkata-based coal trader said, pointing out that in July Chinese imports of coking coal was down three percent at four million metric tons.
 
"A number of Indian steel mills have begun scouting to clinch long-term HCC supply agreements, but reports coming in indicate that Australian miners are not willing. The situation may change once their annual contracts with Chinese mills are up for re-negotiations," he added.
 
In the first week of the current month, Australian offers were at $195/mt FOB, down from $205/mt FOB in the last week of previous month, he added.
 
Indian steel producers are steadily increasing volumes of coking coal imports in the current month to take advantage of the slump in prices, an official in the raw materials division of Steel Authority of India (SAIL) said.
 
Rashtriya Ispat Nigam Limited (RINL) has floated a tender for import of 325,000 mt of coking coal for September-October shipment, while Mineral and Metals Trading Corporation (MMTC), which had sought offers of 120,000 mt for September shipment, early this month was planning larger shipments for October-November anticipating that the current low prices will be maintained at least until the last quarter, an northern India-based trader said.
 
According to a government committee of steel producers, total Indian imports of coking coal are expected to increase by at least 10 percent during FY 2012-13 to 36.8 million mt to meet a demand of 58.7 million mt.