JSW Surges to 12-Week High on Coking Coal Recovery: Warsaw Mover

Jastrzebska Spolka Weglowa SA and New World Resources Plc (NWR), the largest coking-coal producers in Poland and the Czech Republic, surged to a 12-week high after the commodity extended a rally in China.

JSW gained 7.7 percent to 77.55 zloty at 1:38 p.m. in Warsaw, the strongest intraday level since June 20 and bringing a three-day rally to 19 percent. NWR soared 20 percent to 28.5 koruna in Prague. Spot coking coal, used for steel making, rose 1 percent to $150.5 per metric ton yesterday, the highest since April 12. The commodity has surged 16 percent in the quarter.

“The global economy has likely bottomed out, which boosts forecasts for the steel market,” Lukasz Prokopiuk, a Warsaw-based analyst at broker Dom Maklerski IDM SA, said by phone today. “The prospects for coking coal are very good.”

Coking coal prices at the current level signal the benchmark price for the fourth quarter will settle in a range of $155 to $160, Mitesh Thakkar, an analyst at FBR & Co. in Arlington, Virginia, wrote in a note yesterday. The commodity tumbled in the first two quarters of the year, weighing on JSW and NWR shares, which are down 16 percent and 71 percent respectively in 2013.

Coking coal will be stable in the fourth quarter compared with the third, JSW Chief Executive Officer Jaroslaw Zagorowski said on Aug. 12. The company has an “ambitious objective of not generating a loss” this year after sales and net income in the three months through June retreated, he said last month.

“Under a good scenario, fourth-quarter coal prices in Europe may come up to $160 per ton, which would mean JSW will generate profit in the whole 2013,” IDM’s Prokopiuk said.

To contact the reporters on this story: Maciej Onoszko in Warsaw at monoszko@bloomberg.net; Maciej Martewicz in Warsaw at mmartewicz@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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