Higher coal prices hurt steel industry's growth plans, says S&P Global
Malabar Gold, Senco debut on Deloitte's global luxury goods list The research firm raised its metallurgical coal price assumptions for 2024 to $270 per ton from $220 per ton. The primary drivers behind this surge are limitations in supply from Australia, heightened tensions in the Red Sea region, and robust demand from India and other markets outside of China.
Notably, average metallurgical coal prices experienced a significant 25% increase quarter-on-quarter during the last three months of 2023. “Our price assumptions are, however, lower than the average price of US$300 per ton in 2023 and current spot price of US$315 per ton.
This is because we anticipate supplies from Australia will improve in the second half of 2024 with the opening of several new mines, especially in the states of Queensland and New South Wales," Bharati added. Also read: Ad spending in India to grow at a slower pace in 2024, says GroupM In the fiscal year 2025, ending on March 31, 2025, domestic steel prices are poised to receive a boost from heightened demand.
This surge in demand is anticipated to stem from escalated infrastructure expenditure, particularly as the deadline for the completion of the National Infrastructure Pipeline in 2025 approaches. Bharati further said, “India steel prices will strengthen over the next year, in our view, but not enough to match the rises in input costs.
As a result, we estimate our adjusted consolidated debt of major steel producers at Indian rupee (INR) 2.1 trillion as of March 31, 2025. This is about INR150 billion higher than our previously anticipated level." Also read: Govt's rooftop solar scheme gets a name; investment pegged at ₹75,000 cr The report further forecasts that the average debt-to-EBITDA ratio
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