Coking coal prices may jump 22%

May 29 | Updated: May 30 2007, 05:30am hrs
The price of coking coal, used in steelmaking, may jump 22% next year because of rising demand from India and congestion at Australian ports, said Goldman Sachs JBWere Pty.

Contract prices for coking coal may rise to $120 a metric tonne for the year starting April 1, from $98 this year, analysts led by Malcolm Southwood said in a report on Monday.

The brokerage, the Australian affiliate of the worlds biggest securities firm, had forecast a fall to $90. Steel Authority of India Ltd, the nations biggest state-run steelmaker, this month said it plans to import 14% more coal as it increases production to meet rising demand from construction companies and carmakers.

India is the worlds third-largest importer of coking coal, Goldman Sachs said. It could increase coking coal imports to 25 million tonne this year, up from 21 million tonne in 2006, Goldman said. Bloomberg

With no evidence of any slowdown in demand, and no quick fix to the logistical bottlenecks afflicting suppliers, the analysts said, we believe the market will remain in bulk upgrade mode.

Australia, the worlds largest exporter of coking coal, is likely to lower exports this year due to congestion at its Dalrymple Bay port in Queensland state.