The president of Japanese trading house Sojitz Corp, Yoji Sato, has announced plans to increase holdings of coking coal using funds from the planned sales of thermal coal assets.
The price of coking coal nearly quadrupled between March and late November 2016, but was then slashed in half by the end of March 2017.
Prices then rose again after Cyclone Debbie hit Northern Australia, the world’s largest coking coal export region. The storm cut rail lines, hampering Queensland’s exporting capability.
The price of thermal coal has also surged by more than 50 percent over the past year backed by increased demand across Asia.
“It’s difficult to buy coking coal assets at the moment as prices have climbed so much,” Sato told the press. “But we’ll continue to seek opportunities to cut some of our thermal coal assets and raise our coking coal exposure.”
Sato was speaking at a briefing where Sojitz forecast a 22.7 percent increase in net profit for the current fiscal year ending in March 2018 to 50 billion yen ($447 million), backed by stronger profit in coal assets and a turnaround in food and agriculture businesses.