Met coke offers decline in eastern India, while producers in western belt reduce output

Indian met coke prices continue on downward trajectory this week too, with the price for BF grade (25-90mm, 64% CSR) coke currently assessed at INR 41,000/t in the eastern belt, down by INR 2,000/t w-o-w.

Interestingly, met coke producers in the western belt are preferring to cut down production rather than lower prices. As per market sources, key producers in the west are currently operating at capacities as low as 50%. The latest offers for coke in western India were heard at INR 48,000/t.

Met coke producers in the west have non-recovery type coke ovens that are comparatively easy to shut down, while in the eastern belt a maximum number of producers have recovery ovens that cannot be shut down easily and takes about two-three months to restart once shut down. This explains the price gap in the two zones.

However, buyers in the west have the option to buy coke from producers in the east by paying an additional transportation cost of INR 4,000-5,000/t, which ultimately pushes up coke prices to INR 46,000/t. The alternative cheaper option is to buy coke from the south where the transportation cost is comparatively cheaper.

Coking coal prices keep plunging 

Australian coking coal prices have fallen $48/t w-o-w to $302/t FOB HayPoint.

Weakened steel demand in the global market is the key reason driving down prices. Experts believe that prices were unreasonably high due to supply disruptions, pandemic and other geopolitical factors and are now sliding back to reasonable levels.

Indian buyers uninterested in Chinese coke 

Indian steel mills have completely moved to the sidelines post the export duty announcement on steel in the last week of May and domestic steel demand is currently quite sluggish.

Buyers are not even interested in Chinese coke, which is available at cheaper rates. In fact, in China’s domestic market, another round of price cut is likely after the previous cut of RMB 200/t a few days back.

Outlook 

Domestic coke prices in eastern India may continue to face downward pressure with further fall in coking coal prices amidst tepid steel demand. With the onset of monsoons, the near-term outlook for steel demand remains sluggish which is exerting pressure on prices.