Chinese metallurgical coke export prices have decreased further this week under pressure from weakening demand in overseas market, while influx of met coke from other origins such as Japan and Korea also created competition on prices.
As Japanese and Korean steel mills curtail production amid the COVID-19 viral outbreak, both the countries witness lower demand for met coke and are selling their surplus met coke to the Chinese market at hefty discounts, making it hard to export met coke from China at present.
Similarly for the Chinese domestic met coke market, four rounds of price cuts have materialized, and trading sources are concerned if there would be a fifth round. Offers for Chinese domestic met coke of all grades have dropped at the country’s major coal-handling ports, reflecting the fourth round of price cut. However, prices for weaker grades of met coke at the ports have dropped faster due to weaker demand for these types of met coke.
Domestic prices of merchant metallurgical coke across China will possibly keep trending downward throughout this month, amid lukewarm demand from steel mills.
Chinese steel mills’ appetite for met coke remains low as their finished steel sales have stalled amid the weak downstream demand. At the same time, the high finished steel stocks and the plunging steel margins may continue to compel steel mills to reduce output or halt production to conduct maintenance on facilities. Consequently, steelmakers are now buying met coke only when in urgent need and are trying to lower raw material buying prices to control cash flow.
The weaker steel demand, as end-users close plants to deal with reduced activity, has increased uncertainties across the wider European market. In Europe, several blast furnaces are operating at low levels of productivity, and are thus consuming less met coke, according to sources. Meanwhile, PCI injection rates may remain strong with relatively low prices for PCI maximizing met coke replacement where possible.
Indian met coke buying sentiment is also bearish as the corona virus crisis has affected the economy and reduced raw materials demand from downstream steel sector.
PRICE ASSESSMENTS
Chinese metallurgical coke export prices for the 64% CSR and the 62% CSR grades are assessed at around USD 269.00/MT and USD 249.00/MT FOB China respectively.
Indian metallurgical coke import prices for the 64% CSR and the 62% CSR grades amount to USD 285.00/MT and USD 268.00/MT respectively on CNF India basis.
Source: CoalMint Research
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