12 / 12 / 09 We can't afford to ignore our coal resources AS world leaders gather in Copenhagen for the climate change summit, the UK delegation sho..
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22 / 06 / 09 Anglo stresses early-stage nature of Xstrata 'proposal' The board of diversified mining group Anglo American confirmed on Sunday that it had indee..
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14 / 04 / 09 China economy shows signs of recovery China's economy is showing signs of a nascent recovery, but even officials who want to boo..
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02 / 01 / 09 China turns screws on iron ore giants JUST days into the new year the signs from China for our battered big miners are ominous.
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04 / 03 / 10 in
China iron ore price hike report seen as "posturing"
A Chinese media report that global miners are offering Chinese steel mills a 50 percent rise in iron ore prices was dismissed as posturing by analysts, who predicted a rise of 65 to 70 percent instead.
China has by far the world's largest steel sector, producing almost half of global crude steel last year, when the country's iron ore imports surged 42 percent to a record 628 million tonnes to feed the rampant production.
The head of the iron ore department of a large Chinese steel mill told the state-run China Daily that the big three iron ore miners -- Vale (VALE5.SA), Rio Tinto (RIO.AX) and BHP Billiton (BHP.AX) -- were seeking a 50 percent hike in term prices from 2009 levels.
BHP and Rio Tinto officials declined to comment on the report as a matter of policy.
However industry analysts said 50 percent looked low, considering soaring spot prices, which have risen more than 50 percent since September, and recent comments from mining companies about the gulf between the benchmark and the market.
"I think this is posturing and very much to be expected this time of year. With the big iron ore producers voicing an interest in spot pricing, it will be very tough for the steel mills to fight a big price increase," said ANZ's senior commodity analyst Mark Pervan, who forecast a 70 percent rise in ore prices.
"Steel mills are getting ready for increased raw material costs. Japanese mills are talking about a 30 percent rise in hot-rolled coil, equivalent to an additional $180 a tonne. But to cover a 70 percent rise in ore and a 72 percent rise in coking coal would only take a 19 percent increase in HRC prices."
Spot iron ore on a landed China basis is trading around $134 a tonne, double the 2009 free-on-board contract.
Iron ore miners, BHP Billiton in particular, have talked at length in recent weeks about the difference between spot and annual prices, hinting that contract prices and the spot market needed to converge.
Last year's contracted iron ore prices were around $62 a tonne and coking coal was $129. Based on 1.6 tonnes of iron and 0.6 tonnes of coking coal to make one tonne of steel, Japanese mills could be positioning product prices for a worst-case scenario of a 100 percent rise in coke and ore costs.
The China Daily quoted the steelmill official as saying Baosteel, which is leading the talks this year, "would wait and see how Japanese and South Korean steel mills react to the proposal before taking a decision".
"If other Asian steel mills accept the new ore prices, then Chinese steel mills will have no other choice but to accept the same, as stopping production is not in the best interests of the industry."
A source at South Korea's top steelmaker POSCO said it had not received any official offers from major iron ore suppliers yet, but added that miners have said, during casual meetings with mills, that prices should return to 2008 levels.
The collapse of financial markets in 2008 prompted a 33 percent fall in annual iron ore prices settled with Japan and South Korea.
Steep prices may force steelmakers to shift away from decades-old annual benchmark pricing and adopt a hybrid annual or quarterly set pricing model, the POSCO source added.
"Steelmakers will have to use a differential negotiating system -- i.e., partly accepting a quarterly index system. While we cannot say officially that we would accept it, there should be a certain momentum to change the system."
IRON GIANT
The China Daily said China's crude steel output was expected to rise 8.6 percent to 621.5 million tonnes in 2010, a slower rate of annual growth than last year's 13.5 percent, without citing a source for the forecast.
That would imply a rise in annual production of 54 million tonnes, compared to 68 million tonnes last year.
Shipments of iron ore dropped in January but are expected to rebound to a monthly record of more than 60 million tonnes in March, the China Securities Journal reported, citing industry analysts.
"The physical market is being driven by Chinese demand, supported by a continuing recovery in steelmaking across the developed economies," said managing consultant David Tucker at Hatch Beddows.
"Combined with falling freight rates this has resulted in a period of sustained price premiums between the Chinese spot market and the equivalent Brazilian and Australian FOB prices."
The firm has lifted its projected outcome for a price settlement to a 65 percent rise from 33 percent in January.
"At the end of last week we calculated the benchmark to spot premiums as 86 percent and 115 percent for Brazil and Australia respectively. In early December the Brazilian FOB benchmark was still at parity with the CFR China spot market and this tempered our January forecast."
With all three big miners likely to be comfortable accepting spot prices for their products, there may not be a settlement at all, Tucker added.
22 / 02 / 10 in
S&P, Moody's May Raise Rio Ratings
Rio Tinto Group, the world's third- largest mining company, may have its credit ratings raised by Standard & Poor Corp. ‘s and Moody's Investors Service because higher iron ore prices, National Australia Bank Ltd. said.
There is increased confidence that annual contract iron ore prices may rise by plus 40 percent this year “and this will further underwrite an upgrade,” the bank said today in a credit research note. Standard & Poor's and Moody's may increase their ratings within six months, it said.
Fitch Ratings raised its rating on Rio Tinto on Feb. 19 to “A-” from “BBB+” after the London-based company cut its debt and as China’s demand for raw materials increases.
Rio Tinto agreed last year to form an iron ore joint venture with BHP Billiton Ltd. and will receive about $5.8 billion as an equalization payment. Rio may use the money to support higher spending rather than reduce debt, Fitch said.
Credit-default swaps on Rio dropped 10 basis points to 95 basis points as of 10:55 a.m. Sydney time, according to Deutsche Bank AG. A decline indicates improved perceptions of credit quality.
Standard & Poor's has a “BBB+” rating on Rio Tinto and Moody's has a “Baa1” rating on the company.
16 / 02 / 10 in
Palmer Says China Coal Deal Binding After Name Error
Australian mining magnate Clive Palmer said a deal to sell $60 billion of coal to China is “binding,” four days after incorrectly naming the customer for a mine he is yet to build.
Palmer’s Resourcehouse Ltd. made a “mistake” in a Feb. 6 statement, wrongly naming China Power International Development Ltd. as the buyer, he said in Perth today. The agreement, which Palmer says is Australia’s largest export deal, is with unlisted China Power International Holding Ltd., he said yesterday.
The confusion may hamper plans by Palmer, Australia’s fifth-richest man, to raise as much as $3 billion in a Hong Kong initial public offering to fund the development of his coal and iron ore projects.
“I presume it will affect the investors as the company hasn’t got those details correct in the first place,” said Lewis Wan, chief investment officer for Pride Investments Group in Hong Kong, which manages $150 million. “However, the actual impact on the deal should not be very big.”
Palmer, a law school dropout who made his first fortune from real estate on Australia’s Gold Coast, says he’s been to China more than 50 times. Business Review annual rich 200 list published in May, named him as the nation’s fifth-richest man with a fortune valued at A$3.4 billion ($3 billion).
Accord Affirmed
China Power International Holding, a unit of China Power Investment Corp., yesterday affirmed an accord with Resourcehouse to buy 30 million metric tons of coal a year for 20 years from the proposed China First project in Queensland.
In a video presentation shown after the press conference today in Perth, Zhao Yazhou, Vice President of China Power Holding International Holding Ltd., speaking through an interpreter, referred to the accord with Resourcehouse as a “framework agreement” and said it was pending final approval.
Earlier yesterday, China Power International Development Ltd. said in a statement to the Hong Kong stock exchange that it hadn’t signed any accord with Resourcehouse.
Resourcehouse wants to sell coal and iron ore to supply steel mills and power companies in China, challenging producers such as BHP Billiton Ltd. and Rio Tinto Group. China, the world’s largest consumer of coal and metals, last year announced $32 billion of resource acquisitions to fuel the world’s fastest-growing major economy.
Last Emperor
Palmer awarded an $8 billion engineering and construction- management contract for the China First project to Metallurgical Corp. of China Ltd., according to the Feb. 6 statement. Metallurgical Corp. signed an accord to buy $200 million of shares in Resourcehouse, the Chinese company said Feb. 3 in a filing to Shanghai’s stock exchange.
Palmer has long-term personal contact with China stretching back to 1962 when as a boy he met Pu Yi, the last Emperor of China, in Beijing while on a visit with his businessman father.
A licensed real estate agent and owner of the Gold Coast United soccer team, Palmer retired at 29 after he’d amassed a fortune of about A$40 million through real estate investment on the Gold Coast, a tourist strip with 70 kilometers (44 miles) of beaches and home to Q1, the world’s tallest residential tower. He came out of retirement two years later to buy the Australian assets of U.S.-based Hanna Mining Co.
His reputation in China hasn’t been damaged by the naming blunder, he said.
Government Approvals
“The biggest hurdles we’ve got to jump over for the project overall, and you can take that to mean the contracts too, is the Australian government and Queensland government making sure approvals go through on time,” Palmer said.
His IPO, should it be sold at the top of its $2 billion to $3 billion range, may be the biggest in the industry since Eurasian Natural Resources Corp.’s $3 billion share sale in 2007, according to data on the Bloomberg. The sale has been delayed for a second time to March, the Australian newspaper reported Jan 25. Palmer said today there had been no delay because no timetable had been set.
Resourcehouse also has the rights to 10 billion tons of iron ore in Western Australia, according to Macquarie Group Ltd., one of the IPO managers.
04 / 02 / 10 in
In 2010, China coal output to reach around 3.3bln tons
It is expected that China's coal production in 2010 will reach around 3.3bln tons.
It is predicted that in the first quarter of 2010, the tight coal supply still last, and the high coal price still continues rising. In the second quarter, due to the seasonal drop in demand, the price may fluctuate, but the price in the entire year still post the climb trend during the stability.
In 2010, two favorable aspects have the impact on coal market. One is that the global economy recovering trend is basically emerged, the global power and steel production started to slightly increase, with the economic rebound, the crude oil and coal demands will continuously jump. The other is that China's economy gets warmer, affected by the governmental positive finance policy and moderately loose currency policy, the overall economy will pick up. The coal demand from power, steel, chemical, construction still rapidly increases, supporting the domestic coal demand to hike.
In 2010, the overcapacity and pollution in coal industry will be important task of macroeconomic control.
In 2010, the domestic coal production will come to around 3.3bln tons, China's coal demand still upswings. From the current high international coal price and international energy demand situation, the coal import scale should be lower than 2009, the coal imports in the full year will remain around 100mln tons, the coal exports probably reach 25mln tons.
25 / 01 / 10 in
China may be put on the spot over iron ore
The hottest commodity of 2010 could well be iron ore. That's why there is a great deal of uncertainty over pricing.
Iron ore is one of the essential building blocks of the Chinese economic miracle. It is used to make steel, which is vital for the country's infrastructure plans. If China can't continue to build, its economy will grind to a halt - and bring a multitude of problems to the country.
China does have its own reserves of iron ore but, compared with what can be found in the Pilbara region of Western Australia, for example, it is low grade and expensive to process. Iron ore imports are essential to feed the hungry China machine.
All of this means that China needs the three main suppliers – Rio Tinto, BHP Billiton and Brazil's Vale – as much as these companies need China, the world's number one customer for the sector.
However, pricing talks have got very sticky - in fact, it appears they have completely ground to a halt. Traditionally, iron ore prices are set by annual negotiations with steel makers, with contracts taking effect on April 1 each year. However, last year's talks ended disastrously. No agreement could be reached and Chinese officials ended up walking away from the discussions.
The China Iron & Steel Association (CISA), which was leading the talks, wanted a better price than the benchmark agreed with Japanese mills, which had accepted a 33pc cut in the price. It wanted a 40pc cut to reflect its importance in the market.
The situation was complicated further when four of Rio's officials who were involved in the pricing talks were arrested - accused of corporate espionage. All of these men, including Australian national Stern Hu, continue to await their fate.
This issue stirs strong feelings in Australia, because the country's mining industry is so vital to its GDP.
Tensions ahead of the latest pricing talks have risen so high the Australian press have been waging an increasingly hostile campaign against the Chinese.
An un-named senior executive in the mining industry recently told Business Day that CISA had so far "repeated all the mistakes of last year and added a few more" in this year's iron ore talks. The Chinese stand accused of "lobbing bombastic threats without having any strategy for following through".
It is believed that, two months ago, CISA demanded a "China price" for its iron ore – at a discount to steel mills in other countries.
However, the spot price has jumped by more than a third over this time. Last
year, steel production in China rose 14pc to a record 568m tonnes, according to the National Bureau of Statistics.
This has helped drive the iron ore spot price to a record $135 a tonne in recent weeks - more than double last year's agreed benchmark price of $60.4 a tonne. However, despite CISA's hopes of a discounted China price, it is believed that the organisation has not been in contact with any of the major miners since this request two months ago.
All of this means that the trend over the last few years away from the benchmark system is inevitable. Usually the benchmark price is set at a discount to the prevailing spot price.
Some interesting pieces of information were revealed last week that may have weakened China's hand in any benchmark discussions. Both BHP and Rio Tinto revealed that they had produced iron ore in record quantities in the fourth quarter.
Despite this record production, the spot price still rose significantly over the period.
The miners cannot therefore be accused of keeping down supply to inflate artificially the spot price to help with pricing talks.
Demand was strong for this essential commodity even when production was at a high. BHP also said that it had sold 46pc of its ore in the final quarter of 2009 on short-term contracts. This is a mixture of the spot price, quarterly agreed prices and hybrids of the two.
For a number of years the company has made no secret that it would like to move away from benchmark pricing - and this year could be when it happens for good.
Because of the confusion caused by CISA, it is now believed that large steel mills such as Wuhan Iron and Baosteel have bypassed the official talks and are dealing directly with miners.
China may, after all, secure its "China price" for iron ore. The only problem is, it could be at the higher spot price rather than at a discounted benchmark level.
Ultimately, the market will move to more short-term pricing. After the volatility in prices we have seen over the last two years the reason for this is clear.
Both Rio Tinto and BHP declined to comment on the pricing talks, as they never comment on such speculation.
14 / 01 / 10 in
Big miners shun China during iron ore price talks
Global miners have sidelined China, their biggest customer, in the annual iron ore price negotiations because of political gridlock over the resource in the industry and government and fears about retribution if the talks collapse.
Vale of Brazil, Rio Tinto and BHP Billiton, the big operators that mine iron ore in Australia, are talking instead to Japanese customers to reach a benchmark agreement that they can present to Beijing on a "take it or leave it" basis.
The move to sideline Beijing is remarkable as China is by far the world's largest iron ore importer, accounting for over 50 per cent of the seaborne market.
The miners have so far held no substantive negotiations with the Chinese side, led by Baosteel, the big state-owned steel mill, according to people familiar with the talks. They added that there were no plans to travel to China for talks, meeting instead in Singapore.
One executive said: "As far as I am concerned, they [the Chinese negotiators] could come over to Australia if they want to talk."
The Chinese side has been hamstrung by internal disputes between steel companies and the industry association over how to manage any talks and a price they should agree on.
Prospects for a deal this year have been further complicated by the detention last July of Stern Hu, Rio Tinto's former iron ore executive in China, along with three other employees of the Anglo-Australian miner, on charges of obtaining commercial secrets.
The Australian government said yesterday that Mr Hu's case has been referred to the prosecutor to decide whether or not he and his colleagues will stand trial.
Under Chinese law, the prosecutor has 45 days to decide, said Tao Wuping, lawyer for Liu Caikui, one of the Rio employees detained.
Legal sources said they expect that even though Chinese law allows for the possibility the men will be released, they are more likely to be charged and brought to trial, any time from the end of February.
The miners hold the upper hand in the negotiations after the cost of iron ore on the spot market surged last week to a 1½-year high of $131.20 a tonne.
Excluding freight costs, spot prices are more than 90 per cent above the $61- a-tonne level agreed in the 2009-10 contract talks.
06 / 01 / 10 in
India May Have Become Top Buyer of South African Coal
India may have overtaken Europe for the first time as the biggest purchaser of South African coal in 2009, according to Raymond Chirwa, Richards Bay Coal Terminal’s chief executive officer.
Shipment levels to India and Europe in the year’s first 10 months were similar, while the final two months are being calculated, Chirwa said in a phone interview today. “It would be a big shift” if India were the largest buyer, he said.
Richards Bay, on South Africa’s northeastern coast, handles almost all of the nation’s outbound coal shipments and is owned by Anglo American Plc and its other leading exporters of the fuel. While the port is the biggest source of coal for European power plants, Asian buyers have been increasing purchases, including lower-quality fuel.
“You have strong growth in India and weakness, if not contraction, in terms of growth in Europe,” Daniel Brebner, an analyst at Deutsche Bank AG in London, said in an interview. “It isn’t surprising that you are seeing this evolution of exports by the South Africans into near Asia.”
Indian Imports
India’s power ministry has advised local generators to import 28.7 million metric tons of coal for the year ending in March to meet a shortfall, Coal Minister Sriprakash Jaiswal told parliament in writing on Dec. 7. Coal India Ltd., the country’s biggest producer, may acquire mines in the U.S., Australia and other nations to bridge the domestic shortage, Jaiswal said in a written reply to lawmakers on Nov. 23.
Overall exports from Richards Bay fell for a fifth straight year in 2009 as rail services deteriorated, sliding to 61.14 million tons from 61.7 million tons in the prior year. Chirwa gave no breakdown for coal shipments by destination.
State-owned Transnet Freight Rail delivered 61 million tons in the year, less than the terminal’s 76 million-ton capacity, Richards Bay said in an e-mailed statement.
“We still see that there is the biggest impact coming through from rail services,” Chirwa said, adding that talks are under way with Transnet Freight Rail.
Spokesman John Dludlu at Transnet Ltd., the parent company of Transnet Freight Rail, declined to comment.
91 Million Tons
The terminal, founded as a 12 million-ton facility in 1976, aims to raise annual capacity to 91 million tons in the second quarter, making it the world’s biggest coal-export port, according to the statement.
Exxaro Resources Ltd. and other black-owned mining companies are expected to join Anglo and other users of the facility this month as part of an accord related to expansion at the terminal, Richards Bay said.
Prices for coal shipped from the terminal reached the highest in almost a year in the three days to Dec. 31, rising 4.8 percent to an average of $81.20 a ton, according to Petersfield, England-based researcher McCloskey Group Ltd. It was a seventh consecutive weekly gain, driven by coal demand from China, the world’s biggest consumer of the fuel.
“It’s a knock-on effect,” Mike Newman, an analyst at McCloskey, said by phone yesterday. “Chinese prices rise, which makes Australian coal more expensive, and Australian prices are dragging up Richards Bay prices because they are going into the same market, which is India and China.”
China’s northern Shanxi province closed power stations with more than 4,000 megawatts of capacity yesterday because weather- related disruptions cut coal deliveries, the official China National Radio reported today. The country’s coal imports rose in June to the highest for customs figures on Bloomberg going back to December 2004.
28 / 12 / 09 in
Old King Coal will stay on the commodities throne for years
Waking up to a stocking full of coal is probably not the most exciting start to a Christmas morning. But at least it's got a better chance of increasing in value by next year than a Wii Fit or a Zhu Zhu Pet.
There are many dismissing coal as the unwanted black sheep of the fossil fuel family, blamed for 40pc of the world's carbon dioxide emissions that contribute to global warming.
But in defiance of environmental concerns, there has been little sign that any fall off in coal demand this year is due to anything other than the recession.
Analysts from JP Morgan reckon that thermal coal, used in power stations, will rise from $70 to $85 per tonne next year, based on rebounding demand from China and India. While global inventories have been unusually high in the downturn, the bank believes stocks may decline from 40m tonnes this year to 22.7m in 2010.
"Supply will be tight in the next two years," said Stevanus Juanda, a mining analyst. "In the second half of 2009, we have observed sizeable imports of coal by China, due to the closure of mines in the Shanxi region and rise in electricity generation."
Experts are also predicting a shortage in coking coal used to make steel over the next year, driven up 12-fold by demand from China.
Macquarie, JP Morgan and Morgan Stanley estimate that prices may jump by between 23pc and 38pc in 2010, as global demand rebounds.
And the International Energy Agency believes that coal will account for 29pc of global energy needs in 2030, compared with 26pc in 2006. For Deloitte's energy consultants, this all goes to show that green problems with coal do not yet tarnish its prospects as a "key fuel for the future".
Listening to the political leaders at the Copenhagen climate change conference, you could be forgiven for imagining that the world was about to be seized with a Thatcherite fervour for closing down the mines.
That was the political rhetoric. But the summit failed to reach agreements on targets for lowering emissions and how they should be financed – mostly because burning coal is still in the national economic interest of most developing countries.
In the aftermath of the Copenhagen chaos, Western politicians have been blaming China and India for sabotaging the talks. If true, it is hardly surprising that they want to resist curbs on the predicted growth of their emissions, largely based on soaring use of coal.
The Copenhagen accord may have been vaguely worded, but its implications for commodities are clear: businesses still have little incentive to invest in more expensive renewables and nuclear power while coal and gas are cheaper.
Europe has decided to start closing coal plants without "carbon capture" facilities and China is keen to get its hands on this future technology, but the fact remains that old coal stations are still being built at the rate of one a day.
With "clean coal" technology unlikely to be commercial for another decade, it at least remains a helpful myth for politicians and companies to justify continued investment in the commodity.
21 / 12 / 09 in
China in need chases coal for winter
INCREASED Chinese thermal coal imports and South African port constraints should boost Australian coal prices and demand in the new year, potentially lengthening queues at Newcastle.
According to Chinese media, the nation is preparing for a seasonal jump in heating demand by dropping coal import tariffs and giving thermal coal, used to make electricity, priority over iron ore and coking coal on the railways.
At the same time, bugs in a new computer system and persistent rail problems mean South Africa's Richards Bay coal terminal cannot meet export demand, with miners unable to get growing stockpiles to port, according to Reuters.
Along with increased heating, China's winter coal demand has also been boosted by cold weather closing down some of the nation's hydro-electric power.
This year, winter import demand will be particularly strong as it combines with growing underlying thermal coal demand and domestic supply constraints.
The Asian powerhouse imported 4.1 million tonnes of thermal coal in October, six times monthly imports a year earlier.
Much of the growth was filled by Australia, which exported 1 million tonnes to China, up from 164,000 tonnes in the same month in 2008.
Leading an expected rise in Australian spot prices, Chinese domestic prices have this month risen above delivered prices of Newcastle coal for the first time since May, according to Macquarie analysis.
"We remain bullish on seaborne thermal coal prices given both levels of demand from China and the expected growing appetite to use imported material in coming weeks," Macquarie said in a report released on the weekend.
Last week, Newcastle spot prices were $US81.06 a tonne before shipping, 16 per cent above 2009 contract prices of $US70.
At the same time, there were 53 coal ships waiting to load at Newcastle, the most in almost two years, Bloomberg reported.
Commonwealth Bank analysts said South Africa's coal system computer bugs meant that minimal flows of coal were making it to Richards Bay, where stockpiles were nearing critical levels.
Continued constraints could support Newcastle spot prices next quarter, the bank said.
Last week, Macquarie boosted its forecast for 2010 thermal coal contract prices to $US85 a tonne, up from previous expectations of a $US70 rollover.
Macquarie said it expected 2010 Australian iron ore contracts to be settled at about $US79 a tonne.
This was 30 per cent higher than this year's price of $US60.
04 / 12 / 09 in
Coking coal jumps on China imports
A huge increase in imports by China, particularly from Australia has seen a spurt in coking coal prices. Spot prices of the commodity are ruling around $175 per tonne at present, compared to around $145 a tonne in August. And prices are expected to rise further, with analysts predicting $200 levels by 2011.
If that happens, it could be a double whammy for Indian steelmakers. Rising prices of coking coal could add to their woes of low prices of steel ruling at present.
An Indian steel producer, on condition of anonymity, told DNA Money, "We've been seeing this trend for the last few months as a lot of Australian coking coal is being exported to China. The Chinese buying is cause for concern. We can just hope that the trend is unlikely to sustain if many of the closed mines in China come back into operation." Arun Jagatramka, chairman, Gujarat NRE Coke, one of the largest coke producers in the country, told DNA Money, "China for the first time has become a net importer, which is having its impact globally on the prevailing short supply of good quality hard coking coal thereby causing a spiralling effect on international prices."
Jagatramka said there are two reasons for China's purchases. The first is the consecutive mine disasters that have occurred in recent past, which have shut down production.
Second, though China has huge resource of coal, there are constraints in quality. Trade estimates suggest China's coking coal imports between January and October increased to over 95 million tonnes, a more than 170% increase over the corresponding period the previous year. On the other hand, coal exports from China have decreased by over 50% over the year.
Dipesh Dipu, principal consultant, Pricewaterhouse Coopers, said, "Chinese buying of coking coal would definitely impact spot prices. Once prices go up, steelmakers would face increasing costs of production. It would then depend on whether steelmakers absorb the prices or pass it on to the customer."
Dipu said that prices of coking coal could go up to "$210-220 levels if the trend continues", and that "it could be a cause of worry to steel manufacturers who depend much on imported coal".
"Coking coal is one of the very few commodities whose prices were not affected by the recession. Ignoring last year's windfall, the present price is highest ever in history," Jagatramka said. Prices had shot up to $300 a tonne in 2008.
A recent report of Citi Investment Research & Analysis said that global coking coal prices are expected to harden further and reach $200 a tonne in 2010-11. The semi-soft variety of coking coal is projected at $120 a tonne, up from $100 a tonne. Driven by Chinese imports, prices of the sea-borne variety of coking coal have also increased to $160-170 tonne from $130 a tonne a few months back.
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