Shares of steel companies such as JSW Steel and Tata Steel are likely to remain in focus after Nomura flagged rising coking coal prices as a potential near-term risk for integrated steelmakers.
According to Nomura, safety-led supply disruptions in China have tightened expectations around global steelmaking raw material balances, leading to a sharp rally in coking coal prices. Chinese coking coal futures have already surged nearly 8%, raising concerns over input cost inflation for steel producers globally.
The brokerage noted that Indian steelmakers could face pressure on margins if seaborne benchmark coking coal prices continue to rise in the coming weeks.
JSW Steel and Tata Steel India are among the country’s largest importers of coking coal, making them more sensitive to fluctuations in global coal prices. Since coking coal is a key raw material used in blast furnace-based steel production, any sharp increase in prices directly impacts production costs.
Nomura estimated that every $10 per tonne rise in coking coal prices can result in an EBITDA impact of around $7–9 per tonne for integrated steelmakers.
The development comes at a time when steel companies are closely tracking raw material volatility, global demand trends, and Chinese supply disruptions. Investors are expected to monitor whether companies can offset higher input costs through steel price hikes or operational efficiencies.
At the same time, analysts believe sustained increases in coking coal prices could weigh on profitability if steel spreads fail to improve proportionately.
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