Minister Proposes 30% Increase in Coal Prices

Coal Minister Serhiy Tulub called for an increase in steam coal prices by 30% beginning February 1. In other news, Tulub announced plans to set quality controls for steam coal. Eugene Cherviachenko: We believe that the government will increase steam coal prices soon, but a surge of 30% looks unrealistic – look for a smaller increase. Currently, the average prices for steam coal are USD 52/mt, which with a 30% increase would come to about USD 70/mt, much higher than prices on world markets. In our opinion, quality control is one more step toward more accurate differentiation in prices of low quality and high quality steam coal, which should benefit producers with more calorific coal, especially Komsomolets Donbasa (SHKD: BUY).