Met coal prices may fall; rate correction to help Indian steel makers: S&P
S&P Global Ratings on Wednesday said it is expecting a significant fall in rates of metallurgical coal and Indian steel makers are to benefit from the price correction.
"We expect lower seaborne met coal prices will help Indian steel mills, as they import 70 per cent of their total requirement," S&P Global Ratings credit analyst Anshuman Bharati said.
The agency estimates that a sharp fall in seaborne metallurgical coal prices will improve cash flow and ease pressure on Indian steel producers, he said.
"Our price assumptions are much lower than the average price of USD 370/tonne in 2022 and spot price of about USD 300/tonne. This is partly because we expect the supply constraints in Australia to ease over the next few months as adverse weather becomes less frequent," Bharati said.
Indian steel producers are generally the most sensitive to seaborne met coal prices, as opposed to iron ore prices. This reflects India's status as the world's top importer of met coal and the fact .