Coking coal prices in China, the world’s biggest steel producer, may rise 14 percent next year because of a supply deficit, Citigroup Inc. said.

Supply of the steelmaking raw material will fall short of demand by 27
million metric tons next year, a gap that will be filled by imports,
Citigroup analysts Catherine Wang and Thomas P Wrigglesworth said in a
Dec. 4 report.

China’s $586 billion stimulus spending has boosted steel demand from
property developers and automakers. Steel output in China may rise 14
percent to 570 million tons this year, Xu Lejiang, chairman of the
nation’s biggest producer Baosteel Group Corp., said last week in
Beijing.

“Coking coal is our favorite bulk commodity,” the analysts said in the
research report. “With limited supply, the sector is set to benefit
from high levels of steel production in China.”Hidili Industry
International Development Ltd., southwestern China’s largest producer
of coking coal, gained as much as 2.9 percent to HK$9.35 and traded at
HK$9.25 at 10:40 a.m. The stock has almost quadrupled this year.

Coking coal demand in China may increase 9 percent to 509 million tons
from this year, while production will grow 10 percent to 482 million
tons, the report said. The forecast is based on pig-iron production of
597 million tons next year, according to the report.

Benchmark coking coal prices have risen 10 percent since May to 1,260
yuan a ton in Pingdingshan, according to industry researcher Steelhome.
Pingdingshan, a city in China’s central Henan province, holds China’s
largest reserves of coking coal.

Source: Bloomberg

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    Xishan Coal and Electricity Power Co 000983.SZ, a listed arm of China’s top coking coal producer, said on Friday it plans to raise prices for coking coal from the beginning of next month. It will raise the price for washed coking coal to 1,215 yuan ($178) a tonne from 1,125

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    China, the world’s largest coal user and producer, will remain an importer of the fuel through next year, according to Gerald McCloskey, a founder of the McCloskey Group Ltd. research company. China imported 11.8 million metric tons of coking coal last month, down 15 percent from July, customs office data yesterday

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• India Plan Panel: Let s coal prices on the market, permitting free trade

    The coal pricing may see a complete revamp and the sector may enter into a free trade zone, if suggestions of the Planning Commission are implemented. “…Coal prices should ideally be left to the market and trading of coal, nationally and internationally, should be free,” the Commission said advocating export of coking

• China coking coal shortage

    Wu Chenghou, senior adviser of the China Coal Transportation and Distribution Association, said “Domestic demand for coking coal will rise moderately next year, while global demand may gain faster, intensifying competition.” China’s coking coal imports rose 12-fold this year, boosting sales of BHP Billiton as the government closed smaller, unsafe

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• India: Steel prices expected to rise by 5% in April

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