Seaborne metallurgical coke prices are falling down on weak demand and thin profit margins and in line with sharp falling prices; traders are also reluctant to take strong positions.
Chinese domestic met coke prices are free falling and have witnessed a further correction of USD 6/MT, FOB China. Market participants are in dilemma and giving a mixed opinion on the acceptance of the price cut given the thinning coke profit margins.
Persisting weak demand has kept met coke prices to decline continuously. Last week, met coke prices have witnessed a steep correction of USD 6/MT, FOB China. In the third week of March, prices have seen a further correction of USD 5/MT.
Price correction still not attracting trade on weak demand
In the Chinese coke export market, as the prices have seen a further reduction, traders are still hesitant to take strong positions.
On weak demand due to sufficient inventories kept by Chinese steel mills and thinning coke profit margins, there is very less buying interest seen in the international market.
According to few traders, the material containing Chinese 62%/60% coke was offered at USD 330/MT FOB China, but the buyers’ tradable value was placed at USD 320-325/MT FOB China, into which no buyers were seen showing interest. However, they were hopeful that buying interest could return if the offer prices could be further negotiable.
For the 64% CSR and the 62% CSR grades are currently assessed at around USD 346/MT and USD 332/MT FOB China respectively, down by USD 5/MT and USD 7/MT from the rates that prevailed in the last week (18 Mar-24 Mar’19).
Indian met coke import prices have also seen a gradual decrease of around USD 5/MT. For the 64% CSR and the 62% CSR grades prices are at around USD 359.5/MT and USD 345.50/MT respectively on CNF India basis.
Conversion spread narrows down further
In the third week of March, the conversion spread between 64% and 62% CSR Chinese coke is seen at USD 7/MT. However, the spread between 64% and 62% CSR remained at USD 10-13/MT last week. Furthermore, the spread between each type of coke may narrow in a softening market.
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