What is your outlook on prices of key inputs like iron ore, coke and coking coal and why?
The initial long-term contracts for soft coking coal ie thermal coal for FY07 supply has been fixed at almost 33-35% discount to current year supply prices. In case of hard coking coal (used for steel making) some initial contracts have been signed at $10-15/ton discount to the current years supply price ie at $110-115/ton. We are also renegotiating our existing contracts at about $115/ton. Coke prices are currently hovering in the range $145-147/ton having bounced back to some extent from their recent lows. China has been a major supplier of coke with its huge coking coal reserves. Chinese coke manufacturers who normally have access coking coal at about $90-92/ton, unlike manufacturers in India who pay $115-120/ton, still make good money at the current levels of coke prices. The conversion cost varies in the range of $6-10/ton without any yield loss. The cost of production of coke also depends on the technology used. For instance, in stamp charging technology, non-coking coal blending
