Europe's largest hard coking coal miner Jastrzebska Spolka Weglowa (JSW) said late Thursday it increased its coking coal sales 6% quarter on quarter in October-December to 1.682 million mt, in a period that saw its average coking coal price rise 74%.
JSW said it achieved an average price for its hard and semi soft coking coal of $148/mt in October-December, up from $85/mt in the third quarter and up 68% year on year.
JSW's acting chief executive, Daniel Ozon, said the company, however, had already seen a reversal in the trend of rising prices.
"The reasons for the dynamic growth in spot prices in the third and fourth quarters of 2016 were mainly supply restrictions as a result of the introduction of production regulations in China, the force majeure notice in Australia and the closing of mines in the US that led to a short-term coking coal shortage on the global market, but at the end of the year we saw a reversal of this trend," Ozon said in a statement.
"The coking coal deficit quickly disappeared and prices started to normalize. We also have to return to normality. The company needs a long-term strategy that prepares us for difficult times, to manage unstable and dynamic changes on the coal and coke markets. Work on it has already begun," he added.
Coking coal sales to external customers in the fourth quarter increased 6% quarter on quarter to 1.778 million mt. In the whole of 2016, coking coal sales were up 10% year on year to 6.364 million mt, JSW said in a presentation of its 2016 results.
Coking coal production rose 6% quarter on quarter to 3.014 million mt and in 2016 was up 4% year on year to 11.58 million mt.
JSW's stockpiles of coking and thermal coal amounted to 492,700 mt at the end of December, down 51% year on year and 20% quarter on quarter.
JSW said its unit mining cost increased 3.4% quarter on quarter to Zloty 258.77/mt ($64.84/mt) but in 2016 it fell 18% year on year to average Zloty 251.38/mt.
In the fourth quarter, coking coal accounted for 70% of JSW's total production, down from 71% in the third quarter.
JSW said its productivity increased in 2016 to 710 mt/employee from 631 mt/employee in 2015.
In the coke segment, JSW said its sales fell 14% quarter on quarter to 985,000 mt despite a 19% year on year rise in steel production in Poland and a 5% increase in the EU.
In 2016, coke sales increased 3% year on year to 4.133 million mt. JSW said it achieved an average coke sales price of Zloty 673.33/mt in October-December, up 21% quarter on quarter.
In 2016, the company's average coke sales price fell 10% year on year to Zloty 583.53/mt.
Coke production fell 10% quarter on quarter to 966,400 mt. In 2016 coke production dropped 1.8% year on year to 4.145 million mt.
Coke stocks fell 4% quarter on quarter and 15% year on year to 236,200 mt thanks to the sale of the company's Victoria coking plant.
JSW said it sold 51% of its products to Polish clients in 2016. The largest slice of exports, 11% each, went to the Czech Republic, Slovakia and Italy, followed by Austria 8%, Germany 6%, India 5%, and Ukraine 2%.
The company swung to a net profit in the fourth quarter of Zloty 295 million ($73.9 million) compared with a net loss of Zloty 138 million in July-September.
However, the result was 41% below the market consensus average of Zloty 500 million. In 2016, JSW recorded a net profit of Zloty 6.7 million compared to a net loss of Zloty 3.3 billion in 2015.
As part of its cost-cutting program, JSW said it planned to shut down its Krupinski mine and transfer it to the state mining restructuring company, SRK, on April 1 this year. It closed down the Jas-Mos mining area in October last year.
The company said it has scheduled mining to begin at the Bzie Debina 1 and 2 deposits in the Borynia-Zofiowka-Jastrzebie mine in 2018.
