Steel costs in India are rising owing to “rapidly” rising rates of major raw material coking coal, according to industry executive Bimlendra Jha.
Coking coal is a form of coal that is used to make coke. It is also known as metallurgical coal. Coking coal is a high-quality coal with a high carbon content that is minimal in impurities.
Coking coal softens, liquefies, and then resolidifies into a hard but porous material known as coke when heated in the absence of air. Coke is used in the manufacturing of iron and steel as a fuel and as a reducing agent. Steel is made from two basic raw materials: coking coal and iron ore.
While iron ore is readily accessible in India, steel companies would have to import 90 percent of their coking coal from places such as Australia and South Africa.
Steel is utilized in a variety of items, including automobiles, building materials, refrigerators, washing machines, cargo ships, and medical scalpels. Steel is the most significant engineering and building material on the planet.
Coking coal prices have risen significantly’, Jha, Managing Director of Jindal Steel and Power (JSP), said PTI. ‘They are now selling at USD 341 per tonne CFR (cost and freight) India, up from USD 230 a tonne in June-July 2023’.
“Coking coal prices have increased rapidly (which are) currently trading at USD 341 per tonne CFR (cost and freight) India, from USD 230 a tonne in June-July 2023,” Jha, Managing Director of Jindal Steel and Power (JSP), told PTI.
The steel sector is experiencing an upward price movement due to a major change in coking coal costs, thus the industry has no choice but to pass on the cost to consumers, he said in response to a query on rising steel rates in India.
According to market research company SteelMint India, the cost of per tonne hot rolled coil (HRC) in June was Rs 55,200, but it has now jumped to Rs 58,800 following a price adjustment.
Furthermore, Jha said that the market is seeing a 7-8% increase in steel demand. Following a falling tendency, especially during the monsoon, there is an increase in demand, he continued. Steel is one of the top three most often used metals, and any change in its price affects the whole value chain.
