The recovery of the steel industry has been evident for some time, with full blast furnace capacity restored to operation after the COVID-19 restrictions. European steelmakers have full order books until at least the end of the year and steel products are trading at their highest price levels in years.
High demand for coke persists on the market which, in a limited supply environment, generates high coke to coking coal price ratios, yielding above-average financial results for coking plants. Until recently, coking coal was an exception in the raw materials market. Its prices remained very low contrary to the increasing prices of other raw materials. The reason for this situation was China's continued ban on Australian coal imports, which unbalanced the market and created an unprecedented price disparity between Australian and US coal.
Since mid-May, despite the continuing Chinese-Australian impasse, Australian hard coal prices have been rising steadily, reaching around US$200/t in recent days. Analysts, however, do not agree on the sustainability of this trend, pointing to an announced increase in coal supply and anticipated steel production cuts in China. According to other opinions, the supply problems will not go away soon and high prices will persist for a long time.
“The current level of global prices of coking coal, a key raw material for steel production, guarantees that JSW’s operations will be profitable in 3Q21,” said Barbara Piontek, President of Jastrzebska Spólka Weglowa (JSW).
“Contracts signed by JSW fully cover our production capacity, which allows us to use our full potential. We will feel the current increase in coking coal and coke prices in the third quarter,” concluded Piontek.
Read the article online at: https://www.worldcoal.com/coal/09072021/metallurgical-coal-prices-guarantees-jsws-development/