Steel industry body calls for government intervention to check coking coal price
Industry body ISA has called for immediate government intervention to control the price of coking coal, which has tripled to about $450 a ton.
“Coking coal prices have a huge impact on the industry and the cost of production is impacted, affecting steel prices,” said Alok Sahay, secretary general of the Indian Steel Association during an interaction. with PTI.
The Indian Steel Association (ISA) represents the national steel industry.
Explaining the situation, Sahay said the price of coking coal was between 120 and 130 USD per ton about a year ago.
In March 2022, coking coal prices had peaked at around USD 670 per tonne, he added.
In the current price range, the industry expert said, the cost of coking coal alone in steelmaking is around Rs 28,000-30,000 per ton, which is around Rs 40-40. 45% of production cost. In addition, there are other raw materials such as iron ore, ferroalloys, logistics, fuel costs and other fixed costs.
Sahay further noted that when crude oil prices increase, gasoline and diesel prices also increase, which impacts the entire supply chain. Similarly, steel prices are also increasing along with the increase in coking coal tariffs.
However, the ISA has been asking the government since February 2022 to take notice of coking coal prices, as the association is of the view that “the price must be controlled so that the cost of producing steel can be reduced” .
Coking coal and iron ore are the two main raw materials used in the manufacture of steel.
While iron ore is available domestically, for coking coal India must remain dependent on imports. The country covers 85% of its coking coal needs through imports, mainly from Australia.
The ISA calls for immediate government intervention to control coking coal prices, he said.
The Secretary-General suggested that “the government, either through bilateral talks or through a competition watchdog, could look at the coal indices, its methodology, which is the basis of the coal prices at imported coke so that they represent the true market situation”.
Steel is the most widely used alloy in sectors such as infrastructure, railways, tools and machinery, food processing, metro projects, automotive, construction, etc. A rise in its prices impacts the entire value and supply chain of these sectors.
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