Some Indian steelmakers are planning to introduce force majeure and renegotiate short- and long-term contracts with customers after rising raw material costs, including prices for coking coal.
"Due to the global geopolitical situation, there is a shortage of (coking coal) supply, which is at a very high price," Bhushan Power & Steel, owned by JSW Steel, wrote in a letter to customers. said. Iron ore, which was around $86 per metric ton in January 2021, is currently at $154 CFR China including freight. Coking coal increased from $300 in January 2021 to $700 at FOB Australia in March 2022. Ferronickel prices rose from $35,000 a month ago to $43,000 per ton.
Experts say the rise in the cost of coking coal is due to increased tensions in Russia and Ukraine, as well as a tight supply from Australia, the largest exporter of commodities, due to storms and flooding. Russia is one of the largest suppliers of coking coal after Australia.
JSPL, led by Naveen Jindal, said the company will not apply for a force majeure clause. Instead, it asks its major clients and long-term contract holders to voluntarily accept the price increase.
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