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Nippon Steel taking measures to counter volatile coking coal prices - EVP—The 18th China(Guangzhou)Int’l Heat Treatment, Industrial Furnace Exhibition
5/25/2017 热处理展-工业炉展-heat treatment expo-furnace expo |
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Reuters reported that Japan''s top steelmaker Nippon Steel & Sumitomo Metal is considering measures to counter volatile coking coal prices, such as contracts of varying lengths and seeking out supply sources outside of Australia. Mr Toshiharu Sakae executive vice president of Nippon Steel told Reuters in an interview last week that "Dealing with volatility in raw materials prices has been a long-standing issue ... but with recent volatility, it has become more important to smooth out price impact and secure stable supply.”
One way to do that is supply portfolio management, he said, possibly taking up one-, three-, and six-month or annual term deals, instead of just buying coking coal on a quarterly basis.
He said that other options are buying lower quality coals, procuring more supply from areas such as North America, Mozambique, Russia and Mongolia, and investing in mines. Russian mines could possibly be a target, he added.
Mr Sakae said that "It''s not ideal for our sources to be so concentrated in Australia."
In 2016, Japanese steelmakers bought about 71% of the 59.9 million tonnes of coking coal they consumed from Australia.
Mr Sakae said coking coal prices should stay at USD 150 to USD 200 a tonne based on supply and demand fundamentals, with iron ore prices holding around USD 60 to USD 70 a tonne.
He added that negotiations between steel mills and coal producers to set prices for the April to June quarter are continuing, but Nippon Steel aims to settle this month.
—The
18th China(Guangzhou)Int’l Heat Treatment, Industrial Furnace Exhibition
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