Bullish on Met coke prices: Gujarat NRE Coke

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Arun Kumar Jagatramka, MD Of Gujarat NRE Coke says the company is bullish on Met Coke prices.

For 2007, the company could see another peak year for coke going by the past cyclical trend that one has witnessed, he adds.

Excerpts from CNBC-TV18's exclusive interview with Arun Kumar Jagatramka:

Q: The Mumbai spot prices have recovered, the recent spot deals at about USD 155-160/t versus USD 120-125/t about six months ago, how much of an upside do you see in Met coke prices from here on for the rest of the year?

A: We are bullish on Met Coke prices because for the last nine years that I have been managing the company, I have seen three years of boom and six years of downturn. If one sees June 2004, that was when coke prices had peaked and since then they have been going down. Now for 2007, we could see another peak year for coke going by the past cyclical trend that we have seen.

Q: Given the pace of increase that we are seeing in prices; mid-2005 the prices were around USD 240-250/ tonne band, do you think we will be able to ramp up to that level in the next six months?

A: We should be seeing that price around the Chinese New Year. That is the time when the coke market is tight due to the shortage of shipments from China and prices really move up.

Q: For this quarter, how much of an increase in realizations do you see happening in the light of these spot prices going up?

A: Compared to the previous quarter, I would say Rs 1000-2000 on an average.

Q: You have just forayed into steel production, what kind of revenues do you see coming in from the steel segment of your business for FY07?

A: For FY07, we are expecting small revenue from our steel sector, which would be something like 30-35% of our total revenue.

Q : Could you take us through your mine acquisitions?

A: There have been two mine acquisitions. Both have been pretty good in terms of value that has been added. For the first mine, two years down the line, we are seeing a value, which is four times what we have invested till date including the original acquisition cost.

The production till date in the current year has been about 0.3 million tonnes. We expect that from now till the next 12-months the production should be in the range of one million tonne, which was our initial target.

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