India: Domestic met coke prices fall up to INR 7,000/t as coking coal prices plummet

Domestic met coke prices across India have declined by INR 6,000-7,000/t on w-o-w basis following a steep correction in Australia-origin coking coal prices by $97/t in the current week.

BF grade (64% CSR) met coke current prices (INR/t)

Although bookings have taken place at above prices, bids have dropped further to the levels of INR 50,000-51,000/t in east and west and to INR 49,000-50,000/t in south. In Gujarat, an unconfirmed deal has also been heard at below INR 50,000/t to a chemical plant.

Market participants informed CoalMint that in South, there is increased competition for Chinese material as offers have improved this week. Imported met coke from China is being offered at $664/t which translates to a landed cost of INR 50,500/t on ex-plant delivered basis in Bellary.

“Many furnaces with smaller capacities are using high-ash lower CSR coke and mixing coke breeze (available in plenty) to generate heat. This is why demand is not very buoyant in the domestic market and buyers are having the bargaining power”, said a coke supplier based in Karnataka.

Fall in pig iron prices

Rising steel prices because of high raw material costs have impacted pig iron demand from domestic end-user segment, resulting in a fall in its prices. Steel grade pig iron prices declined by INR 2,700/t w-o-w to INR 57,300/t while foundry grade prices were down by INR 500/t to INR 62,000/t exw-Durgapur basis.

Coking coal prices nosedive

Australian coking coal prices have seen a significant correction this week amid bearish demand sentiments globally. While steel mills are finding it very difficult to carry out the production at higher coking coal costs, lockdowns in China have also dampened the buying sentiments in the global market. Moreover, improved supply situation in Australia added to the existing bearish sentiments.

Outlook

Domestic met coke prices are likely to fall further in the near-term amid expectations of a further correction in coking coal prices as supply situation in Australia improves. Furthermore, buyers’ reluctance on higher prices is likely to pressure coke sellers to reduce their offers further.