UPDATE: Russia’s Evraz sees high coal prices for next six months

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MOSCOW, Sep 28 (PRIME) -- U.K.-based steel and mining giant Evraz, which operates mainly in Russia, expects that coal prices will remain high at least during the next six months, Sergei Stepanov, vice president and head of the coal division, told PRIME on Wednesday.

The coal price was below U.S. $100 per tonne at the beginning of the year and grew to over $200 over the last two months, he said.

“If China is consistent and strives for reduction of steel production, we will see a higher price for steel in six months. The price for coal will not probably be $213 as it is now, but I think it will not fall below $150, because it is difficult to invest in projects at such a price. If China steps back and lifts its restrictions, then a low price for steel will bring coal prices down. That’s why I believe that high coal prices are guaranteed for six months, and whether they remain for 18 months or five years, we will understand within six months,” he said.

Evraz plans to start coal exports to India and other new markets if high prices remain, Stepanov also said.

“With the current market conditions the potential sales geography sharply expands. If two years ago supplies to India were loss-making, there was no sense in them, now it is profitable, and I think we will study this issue,” he said.

Exports to India is a long-term project, as the company does not have extra coal volumes now and so far focuses on supplies to its main clients – the domestic market, Japan and Korea, he said.

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