India’s domestically produced metallurgical coke prices have remained steady since last week, after having risen sharply over the past two months.
Up until August, the widened spread between spot prices for imported coking coal and domestic met coke selling prices in India have been allowing the country’s merchant coke producers to generate significant profit margins.
At the same time, with higher regional steel prices and relatively lower procurement costs for imported coking coal, primary steel producers have been generating better profit margins; thereby leading to more production of met coke and thus necessitating restocking demand for coking coal.
However, seaborne coking coal prices have increased sharply throughout the month of September, thereby increasing cost of producing met coke, and thus encouraging cokeries to consider raising offer levels even further.
Latest offers for Australian premium hard coking coal are assessed at around $151.65/t on CNF India basis, with average spot prices having increased by almost 25% during last month.
Recovery in global steel industry strengthens met coke price outlook
A steady restocking demand for met coke is expected to continue in the near term, as the global steel industry has come back on track, especially with European and Chinese steelmakers having already ramped up production.
India’s domestic steel production has also risen back to pre-pandemic levels with optimum capacity utilization at all the major blast furnaces in the country.
Meanwhile, the domestic demand for steel products in India has partially recovered in the past three months — largely supported by demand growth from the automotive and white goods sectors.
India Coal Import Vessel Lineup
CoalMint’s latest vessel lineup data (as on 28 Sep’20) reveals that an aggregate shipment volume of 151,529 t of imported met coke is expected to be received by 6 Oct’20 in India — 117,543 t at Hazira, 23,993 t at Haldia and 9,993 t at Vizag port.
Notably, all of these inbound met coke consignments are being sourced from different countries, other than China, viz. Poland (141,536 t) and Colombia (9,993 t).
Price Assessments
Indian import prices of met coke are currently assessed at around $289.00/t and $285.00/t for the 64% CSR and the 62% CSR grades respectively on CNF India basis.
Indian domestic met coke prices of the 25-90 mm, blast furnace grade are currently assessed at around INR 24,500/t (east coast) and INR 23,500/t (west coast).
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By Aditya Sinha
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