Indian domestic metallurgical (met) coke prices have fallen further over the past week amidst declining seaborne coking coal prices alongside correction in pig iron prices.
Currently, prices for the 25-90 mm blast furnace (BF) grade material are assessed at INR 45,000/tonne (t) exy-Cuttack and INR 46,000/t exy-Surat, excluding GST @5%.
Pig iron prices impacted
Domestic met coke prices in the merchant market are facing downward pressure because pig iron prices in India are presently on a declining trajectory on the back of easing coal prices.
SAIL’s recently held pig iron auctions from its various plants either saw bids falling sharply or failed to attract any participation at all. Durgapur-based Neo Metaliks has reduced steel grade pig iron offers to INR 42,200/t ex-works (exw); however, sources claimed material availability at INR 41,500-41,700/t.
Moreover, Vedanta Resources’ auction for one rake of foundry-grade pig iron for the northern region received no bids, despite drop in the reserve price by INR 500/t to INR 41,800 exw.
Australian coking prices weaken
Indian merchant met coke prices came under pressure due to the ongoing weaktrend in the seaborne coking coal market.
Australian coking coal prices underwent a downward correction of 10% so far this month and are currently assessed at around $389/t on CNF India basis for the premium low-volatile (PLV) grade of Australian hard coking coal (HCC).
Meanwhile, Australian coking coal supply remains tight as heavy rainfall has soaked much of the Queensland basin, Australia’s major coking coal producing hub. More rainfall is predicted over the rest of the week with a 75% chance of above average rainfall during the ongoing wet season, which stretches from November-April.
Indian met coke sellers active in export market
Indian met exporters continued to remain active in the overseas market, owing to higher margins in comparison to domestic sales.
Export shipments from India have already reached 41,556 t between 1-15 Nov’21, as against nil exports during the same period last month, as assessed by CoalMint.
Notably, this week, an eastern-India based leading merchant met coke manufacturer sold 50,000 t to a major Japanese steelmaker at $650/t on FOB basis for Dec’21 delivery.
Near-term outlook
Australia’s approaching wet season in the year-end would be supportive of its coking coal export prices. This would likely prevent downward price movements for Australian coking coal, and in turn, for Indian domestically produced met coke.
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