Also, the coal prices in other countries such as Australia, South Africa, etc have also shown a significant decline. The Newcastle Index (Australian coal price index) is down by 18 per cent while the Richard Bay Index (South Africa) is also down by 19 per cent. The higher drop in the coal prices is seen in the DES ARA Index which is down by nearly 30 per cent. The fall in the coal prices can be attributed to the over-supply situation created due to the availability of cheap natural gas. The U.S. has been replacing coal with cheap natural gas. Besides, the fall in industrial activity in many countries has also helped the coal prices show correction of between 20-30 per cent in one year’s time. The slowdown in the Chinese economy has resulted in lower coal consumption and thus the Indonesian coal prices have shown a decline.
The situation should look good for sectors dependent on coal, such as power, steel and cement, especially in the view of rupee appreciating sharply against the USD in the last few days. Therefore, there would be some impact on the profits of the companies in the power sector, due to cooling off of the international coal prices. The stock could be moving towards Rs.125-126 in the coming days.
Lanco Infratech Ltd moved to Rs.15.84 before cooling down a bit. The if you remember was first recommended around Rs.13 and also around Rs.11.80 (was asked to be accumulated on all declines). I have today that a brokerage house recommending the scrip and an marketman recommending the scrip in a business channel.