SEATTLE (Scrap Monster): Leading Indian steelmaker JSW Steel Ltd. has raised concerns over the Platts price discovery mechanism for coking coal-one of the primary steelmaking raw materials.
Seshagiri Rao, Joint Managing Director, JSW Steel alleged that Platt’s price assessment included deals between related parties. This is likely to lead to distortion in prices, as steelmakers use Platts price index to enter into long-term contracts with suppliers of the raw material. He pointed out the huge price fall in Australia FoB coking coal, which has fallen by nearly 63% from its peak $670.5 a tonne in March to $250 per tonne in early-December this year.
Furthermore, he noted that Platts takes into consideration in its evaluation process, deals between certain coal suppliers and their sister trading companies, bids amongst traders as well as offers that eventually doesn’t end up in actual deals. This also may create distortion in prices, he noted.
However, Platts spokesperson denied inclusion of related-party transactions in its price assessment. He requested the steelmaker to provide specific instances in support of the allegation, so that it could make further investigations to find out the truth.