See grave scarcity of coal, coke in 6 months: Guj NRE Coke

In an interview to CNBC-TV18, Arun Kumar Jagatramka, Managing Director of Gujarat NRE Coke said that the steel industry in the country is all witness serious shortage of both coal and coke, six months down the line.

"Both coal and coke have a tight demand growth. Hence, when the demand picks up, six to eight months later, you can see a very serious shortage of both coal and coke coming," he said.

Further, he also said that the company has no FCCBs outstanding at the moment. "From a funding perspective, we don't see any issues in any of our operations," he added.

Below is an edited transcript Arun Kumar Jagatramka's interview to CNBC-TV18. Also watch the accompanying video.

Q: Can you take us through the business scenario? Give us an idea of how demand is panning out and more importantly how product prices are panning out for you in the coke front?

A: Coke demand had been stable because despite the sluggishness in steel, there is a shortage of coke and it continues. There has not been any lowering of phase other than within the July to September quarter, when there was an iron ore mining banning in Karnataka that led to closure of almost all the steel players. However, since October the domestic demand had picked up.

There are regular export inquiries, from their yields the steel industry is doing very well this year. And, they have been taking regular coke charges from us. Coal prices for January have been shuttling at 235, which are still higher than the prices a year back. This is despite the sluggishness in the steel.

So, both coal and coke remain tight though the demand growth is not there. However, when the demand growth would be there, maybe six months or eight months down the line, when the demand picks up, you can see a very serious shortage of both coal and coke coming.

Q: How do you see demand and prices moving from hereon? Are you saying that now the steel companies have adjusted to the new reality and they are back on their feet?

A: No, they are now getting the iron ore in the auctions. Since October, we have had regular sales of coke from Karnataka, so from that perspective it was a temporary phenomenon.

Q: We had reports that the FCCB issuance has been cancelled because of the markets conditions. How well funded are you? What are your needs looking forward into of the first half of CY12?

A: We don