Indian steel manufacturer, JSW Steel, is negotiating a 66 per cent lower rate for coking coal from global suppliers at $100 per tonne, Vice-Chairman and MD Sajjan Jindal said.
JSW Steel has already negotiated a 43 per cent cheaper rate for coking coal from global mining major Rio Tinto for the January-March quarter at USD 175 a tonne, against the contracted price of $305 a tonne.
Jindal said the long-term coking coal contracts for the next fiscal would ease out the company's input cost pressure, which partially ate into its margins as it reported a net loss of Rs 127.50 crore [Rs 1.275 billion] for the third quarter of 2008-09.
Selling at $96 a tonne last year, coking coal prices touched $300 a tonne FOB under long-term contracts in the international market. Coking coal is a vital raw material in steel-making.
After touching their peak during the first-half of 2008, commodity prices including that of coking coal fell by over 60 per cent in the spot market due to the global economic crisis.
However, bound under long-term contracts, firms like SAIL and JSW Steel failed to reap the benefits of the price correction.
SourcE: Economic Times
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