Mar260, 2011
In an interview with CNBC-TV18, Arun Kumar Jagatramka, MD of Gujarat NRE Coke speaking about the hard coking coal prices said, "The USD 330 or USD 300 is not something that can be sustained at the current steel prices. Post June, I expect coking coal prices to come down to the reasonable level of 225-250."
Talking about the company’s acquisition plans he said, “We are always looking for acquisition but, Whitehaven Coal is not something that is on our radar.”
The company expects to post better performance in the current quarter than the last three quarters. It aims to cross 200,000 tonnes of production and sales of around quarter million tonne.
By 2015, the company is targeting to achieve 4 million tonne of coke production in India.
Below is the verbatim transcript of Jagatramka’s interview with Latha Venkatesh and Anuj Singhal of CNBC-TV18. Also watch the accompanying video.
Q: We understand that there is an Australian coal mining company Whitehaven Coal which is looking for purchases even the Aditya Birla Group apparently is interested in buying that Yanzhou Mine Company. Are you interested in more acquisitions in Australia and in Yanzhou Mining?
A: We are always looking for acquisition but, Whitehaven Coal is not something that is on our radar. Because it is mainly a thermal coal mine and we are focused on hard coking coal. We would like to remain focused on hard coking coal in the medium-term at least.
Q: Is there anything else on the radar in the next quarter that you maybe announcing in terms of acquisition?
A: New opportunities keep coming all the time. But, we always wait for the right opportunity and as of now, we don’t have any specific good opportunity that could be consider for acquisition.
Q: Have you already signed for the next quarter in terms of coking coal prices and last quarter the average was about USD 225 or so. What is the price that you are looking at in next quarter?
A: April to June quarter prices have been settled around USD 330. As far as signing the contracts, now that our mines are producing at a rate of around 2 million tonne so we are not buying any coal from third parties. Rather we have sold some surplus coal in the last two quarters. In the next quarter also some surplus coal would be sold to Chinese customers.
Q: So till what time do you think prices will sustain at these levels. Do you see then prices coming back to this may USD 250 or so?
A: The effects of floods are expected to be there at least until June. That way last few days also there has been another bout of heavy rains. Some coal shipments have been affected in terms of rail movement and other things.
Not to the extent it happened in January. So, for another two-three months until June you will have the impact of the floods and rains affecting the shipments in Australia.
Q: What would your best guess be of average coal prices in 2011?
A: USD 225 to USD 250 is a reasonable level which should be in the long-term sustainable price. The USD 330 or USD 300 is not something that can be sustained at the current steel prices.
Post June, I expect coking coal prices to come down to the reasonable level of 225-250 which is acceptable to most steelmakers today.
Q: This USD 330 that you are talking about is this one-off or all deals have been signed at this price now?
A: To our understanding most of the deals are being signed around this level because the spot prices continue to be in the range of USD 320-340 dollar level. There has not been any major new coking coal offers coming into the market that would drive down the price.
Q: What kind of projections you have in terms of production and sales of coke in the current quarter and more importantly next quarter?
A: In the current quarter, we should be doing better than the last three quarter. We should be crossing 200,000 tonnes of production and sales around quarter million tonne.
For the next financial year, we are targeting to cross a production level of 1 million tonne based on the current production plan that we have made. (sourced: CNBC-TV18)
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