Miners JSW, NWR Surge on Recovery in Coking Coal: Warsaw Mover

Jastrzebska Spolka Weglowa SA and New World Resources Plc, the largest coking-coal producers in Poland and the Czech Republic, respectively, surged to a two-month high after the commodity extended a rally in China.

JSW climbed nine percent to 78.5 zloty at close in Warsaw, the highest level since June 17, bringing its three-day gain to 21 percent. NWR soared 25 percent, the most on record, to 29.8 koruna at the end of trading in Prague, the strongest level since June 12. 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 this 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.

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