India’s domestic prices for blast furnace (BF) grade metallurgical (met) coke have increased by at least 40% over the past month. Supply tightness and the consistent rally in Australia-originated seaborne coking coal prices have been supporting domestic met coke prices in India.
Prices for the 25-90-mm BF-grade of domestically-produced met coke are currently assessed in the range of INR 45000/t-48000/t along the country’s west and east coasts respectively.
Till last week, Indian met coke prices for the 25-90 mm, blast furnace-origin category were in the range of INR 43,000-44,000/t.
So far this week, no new booking for domestic met coke has been heard in India. The last trade was for a 5,000 t deal reportedly concluded at INR 46,000/t exw-Durgapur to a major steel producer in eastern India.
Presently, however, in the eastern region, prices jumped 11% w-o-w to as high as INR 49,000/t. On the west coast, prices of the same grade have gone up by 8% w-o-w to INR 45,000/t from INR 41,500/t.
Factors driving domestic met coke price surge in India
The strength currently being witnessed in Indian domestic met coke prices is primarily owing to the reason that both Australian and US-origin seaborne coking coal prices are consistently exhibiting sharp uptrends, which is increasing production costs for coking plants.
Moreover, in spite of full-scale domestic production of met coke in India, the country is still facing supply shortage as the material is largely being exported for better price realisations.
Furthermore, conventional met coke trading companies in India have quit importing seaborne material and instead started procuring from the domestic small- and mid-sized cokeries and then exporting it outside.
This shift is pushed by rising international prices of met coke amidst continued tightness in global supply resulting from persistently high demand in China.
In accordance with this shift, exports from India expanded 250% m-o-m to 0.199 million tonnes (mnt) in Aug’21 from merely 55,000 t in Jul’21. Notably, this was an all-time high met coke exports volume from India as the country has traditionally been a net importer of the steelmaking raw material.
Also, as of 21 Sep’21, Indian merchant met coke producers and traders have already exported 0.103 mn t of the material, with shipments mostly being destined for Vietnam and Malaysia, as revealed by vessel tracking data compiled by CoalMint.
Outlook
Indian exports of met coke are well expected to remain at elevated levels given the fact that international met coke prices are not likely to correct any time soon because of the persistently high demand from China.
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