High coal prices hurting

High coal prices hurting
Published: 20 February 2004

The high landed cost of coal into India is hurting the cement companies dearly. From US$35 per tonne early last year, the cost of imported coal has jumped to US$55 per tonne on account of increase in shipping freight and shortage of coal due to China stopping exports in view of high domestic demand. South Korea and Japan, which were procuring coal from China, are now procuring from Australia and Indonesia, thus triggering a shortage. A quick calculation reveals a Rs10 per bag hit for some Indian cement companies due to the incremental cost of imported coal assuming an exchange rate of Rs 45 per US$ and a coal consumption of 12 per cent for every tonne of cement.  International study groups say that shipping rates, especially for the handy-size vessels that normally transport coal into Indian ports, is beginning to peak.