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Coking coal prices set to decline 9.5% qoq
As per media reports, the coking coal contract prices for 4QCY2011 have been settled at
S$285/tonne (-9.5% qoq) between Posco and Anglo American. The qoq decline in the
coking coal prices would be on account of weaker demand coupled with rising supplies
from the flood-affected Queensland region in Australia. This deal could set a benchmark
price for other steel makers and coking coal miners. Going forward, we expect coking coal
prices to decline further as logistics issues are sorted gradually in the Queensland region.
Decline in coking coal prices should benefit domestic steel companies’ margins as we
believe the steel makers may not fully pass the benefits of decline in coking coal costs to
their customers’. We maintain our Buy ratings on Tata Steel and SAIL with target prices of
`613 and `139, respectively.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Coking coal prices set to decline 9.5% qoq
As per media reports, the coking coal contract prices for 4QCY2011 have been settled at
S$285/tonne (-9.5% qoq) between Posco and Anglo American. The qoq decline in the
coking coal prices would be on account of weaker demand coupled with rising supplies
from the flood-affected Queensland region in Australia. This deal could set a benchmark
price for other steel makers and coking coal miners. Going forward, we expect coking coal
prices to decline further as logistics issues are sorted gradually in the Queensland region.
Decline in coking coal prices should benefit domestic steel companies’ margins as we
believe the steel makers may not fully pass the benefits of decline in coking coal costs to
their customers’. We maintain our Buy ratings on Tata Steel and SAIL with target prices of
`613 and `139, respectively.
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