India: Strong domestic demand likely to support coke breeze prices

The changing dynamics in the global coking coal market since past one year is compelling Indian steel players to adopt new approaches to keep their plants running under difficult circumstances. Coking coal and anthracite prices have touched the all-time high levels in March this year post the onset of Russia-Ukraine conflict, adding to the cost burden of Indian steel players.

Coke breeze, a by-product of met coke and a substitute of anthracite, is one such product whose prices and demand are going up in Indian steel circuit since the onset of war.

It may be mentioned that anthracite is used in sintering as an effective way in reducing pollutant emissions and production cost. However, with sanctions in place on Russia by western countries, buying anthracite from Russia has become a major challenge for Indian steel mills, resulting in increased demand for coke breeze. Apart from Russia, imported prices for anthracite dust from USA have also gone up significantly since the onset of war amid changed trade dynamics, further supporting coke breeze demand.

India’s largest integrated steel player, SAIL’s Bhilai plant has issued a buy quotation for about 100,000 tonnes of coke breeze (coke dust) in last fifteen days. The reason for this, as understood by the CoalMint team, is higher strength coke being produced by the company that has led to reduced coke breeze generation coupled with costlier premium coking coal and anthracite, resulting in lowered in-house generation of coke breeze.

Supply constraints

There are only few government entities like RINL and SAIL-RSP that supply coke breeze but in limited quantities. In case of private steel players, they are utilising it for captive consumption amid anthracite supply issues. Meanwhile, traders buying the material from private parties are not getting desired quantities due to a sudden increase in demand.

India also imports high-FC coke fines from countries like Peru and Colombia but amid changed dynamics, trade prices of coke breeze from these countries are also assessed at INR 20,000 – 21,000/t ($262-265/t) in the domestic market.

Thus, amid increased demand due to anthracite supply constraints and growing domestic steel consumption, coke breeze prices are likely to remain supported in the near term.