Coke prices to hurt steel makers
A sharp increase in coking coal prices since August 2016 could squeeze Indian steelmakers' profitability and deepen their financial risks, Fitch Ratings said.
The risk, according to Fitch, will increase if high coking coal prices persist and domestic steel demand growth remains weak. Leverage for producers such as Tata Steel and JSW Steel jumped in the financial year ending March 2016, mainly due to poor profitability, and sustained pressure on margins would hamper financial risk mitigation.
Prices for hard coking coal for export by Australia as of 30 September 2016 were $100 per tonne higher than the average in the quarter ended June 2016 (1QFY17), according to data from The Steel Index. A 125 per cent hike in process.
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