Indian mills have been fishing in the market for booking for some time. Availability of cheaper coking coal from US sources in the range of USD 170 per tonne, FOB has certainly ruffled the equation. Attaining parity with FOB levels of Australian origin on CFR terms US miners is yet to cut much ice.

Indian government companies are inflexible on quality parameters. Making exception to the higher sulphur content in US coke (around 0.85% to 0.90 %) their proclivity is for Australian coking coal.

As a result the Australian miners continue to sell at prices which are higher than US coke. Citing quality and technical reasons Indian companies continue to buy higher quantity of more expensive Aussie coals.

Unlike other private steel companies who have developed new coking coal sources in various countries viz., Mozambique, USA, Canada, even Indonesia, but Indian majors have not been able to make much headway thereby making them dependent of Australian sources.

Source - Strategic Research Institute

(www.coalguru.com)