European Steelmakers Alarmed by Soaring Coking Prices

European steelmakers warned Wednesday that the recent massive increase of cokinda coal prices has threatened to hurt the European steel industry and the economy as a whole.

"The massive increase of coking coal prices, to approximately 300 U.S. dollars per ton from 98 U.S. dollars per ton coming together with the 65 percent increase in iron ore prices, represents a further huge rise in raw material costs for the steel industry," the European Confederation of Iron and steel Industries (Eurofer) said in a statement.

Eurofer's Director General Gordon Moffat said the price hike would be eventually transferred to consumers and therefore hurt the European steel industry and the whole economy, which has already been hit by the ongoing financial turmoil.

"Increases of this magnitude will affect not only the steel industry but also our customers as the additional costs must be passed on in the form of higher finished product prices," he said.

"This will impact the European economy as a whole and comes at a particularly difficult time ... in terms of credit availability and the rising euro in the context of the global credit crunch and the slowing economy," he said.

Nippon steel, the world's second-biggest maker of the alloy, agreed earlier Wednesday to pay mining giants BHP Billiton and Mitsubishi three times more for coking coal this year.

Meanwhile, Moffat reiterated his opposition to the proposed merger between mining giants BHP Billiton and Rio Tinto, saying more concentration in the world's mining markets would lead to further price hike of raw materials for the steel industry.

"It highlights as never before the need for the European Commission to oppose this proposed merger", he said.

Australia's BHP Billiton, the world's largest mining company, is proposing to buy its British rival Rio Tinto, the world's third largest miner, for more than 120 billion dollars.