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An Overview of Future Demand and Prices of Coking Coal

Press Release   •   Sep 25, 2010 12:03 IST

Coking coal or coke is the fuel produced from coal by the process of coking. It is one of the most preferred fuels used for smelting in a blast furnace. Steel production is one big industry that makes use of coke as a fuel. This has led to a global increase in the demand of coke produced from coal.

As a result, there has been a steep rise in the demand as well as price of coke in the past couple of years. Considering the demand of coking coal buyers, one can expect the trend to continue for the years to come. Here is a discussion about the present trends and future expectations of coking coal prices and demand.

One country that has significantly contributed in the rise of coke price is China. The country’s total steel production is over 600 metric tones per year at present. This certainly has added to the demand of coking coal to keep the steel production up and going. In the year 2009, China imported more than 30 metric tones of coke. This steep rise in the demand has enforced the coke prices to shoot up. It is amazing to see the coke prices to rise from $129 to $200 per ton within the difference of a year.  

After China, the second country that has experienced an increase in the demand of coking coal is India. Though, the country’s steel production of 60 metric tones per year is nowhere near to that of China. The country’s steel production growth rate is higher than that of China and this has raised the expectation that total steel production in the country will double by 2012. And the experts in the industry firmly believe it to cross 200 metric tones a few years later. This will certainly led to increase in the demands of coking coal buyers from the country.

As far as the European countries and those in the American continents are concerned, they are too expected to raise their demand for coke. Coke is used as the most preferred smelting agent for the blast furnaces in these countries. The period of recession definitely had an adverse effect on the import of coke by these countries. As the period of recession is getting over, these countries should again start importing more of the coking coal.

Another important development in the industry is that the annual contracts have been shifted to quarterly contracts. BHP of Australia, the largest mining firm in the world, has recently entered into first such contract with JFE Steel of Japan. According to the contract, the coking coal prices are set at $200 per ton. The trend of quarterly contracts is further going to push the coking coal prices upwards. So, those indulged in coal mining and coke production are expected to make great profits in the near future.

You can expect the prices per ton of coking coal to touch the mark of $300. Besides, the rise in the demand of coke would keep on putting pressure on the global supply and demand lines.

Vaiv Jais has wide knowledge of B2B Marketplace and Business industries. Get latest updates on coking coal which are of great demand in B2B space.You can find more free information about Trade Leads at our Trade.indiaMart.com