Europe's largest coking coal producer, Jastrzebska Spolka Weglowa, sees its average price for hard and semi-soft coking coal stabilizing this year at an average $130-$140/mt, CEO Tomasz Gawlik said Wednesday.
"We expect our price to stabilize this year at the level of $130-$140/mt," Gawlik told reporters.
In the third quarter of last year JSW, the latest period for which JSW has published figures, the company achieved an average price of $85/mt. Since then benchmark coking coal prices have surged, with the hard coking coal price averaging $200/mt in Q4 2016.
Gawlik said JSW's Q4 average price followed the benchmark price. JSW also produces cheaper semi-soft coking coal, which means its achieved price is lower than the hard coking coal benchmark.
He said he expects JSW to achieve a similar average price in Q1 to that it achieved in Q4 2016. "Negotiations are still ongoing. Customers do not want to accept a high price and we want to benefit from such prices. We have to close this gap," Gawlik added.
He said the coking coal price would not remain at such levels for a sustained period. "We've said that the price boom is short-term and what's happening in the market confirms our expectations. Demand and supply are balancing out. We expect prices to stabilize at a safe level for JSW."
Gawlik said the company plans to present its updated strategy to 2030 at the turn of March and April. He said the company has earmarked capex between Zloty 800 million-1 billion ($197 million-$247 million) for 2017.
Gawlik said he saw no risk to JSW going ahead with its plan to transfer its loss making Krupinski mine to state mining restructuring company SRK, which was approved by shareholders in December. The transfer is part of JSW's restructuring plan agreed in August last year with financial institutions.
