Declining coking coal prices exert pressure
Chinese producers accept seventh round of price cut
Indian met coke prices have been recorded at INR 33,500/tonne (t) ex-Jajpur this week. Prices remain stable w-o-w. A few mills have taken shutdowns and production is as low as 1,000 tonne (t) per month owing to low purchasing interest by steel mills. Imported met coke prices are still INR 2,500-3,000/t lower compared to domestic material.
Consequently, end users are favouring imported material. Buying interest for coking coal has stayed subdued due to the continuous decline in recent weeks. With falling coking coal prices, procurement of met coke has also been limited, reflecting the downturn in the coal market. Market sources anticipate further declines in coking coal prices, dampening buying sentiments.
Coking coal offers
Australian premium hard coking coal prices remained stable w-o-w at $245/t FOB and $263/ t CNF on 29 March, 2024. Amidst recent sharp price correction due to sluggish Asian demand, market sentiment remains tense. Some market participants anticipate upward price support due to recovery in demand, while others cite a lack of fundamental support, noting unsold trader cargoes yet to be sold to end-users.
Given the downward trend in prices, cokeries are anticipated to implement further reduction in production volumes. This adjustment may involve extending coking hours, tailored to optimise individual margins and operational efficiency.
Imported coke prices
Chinese met coke prices are assessed at $320/t CNF India, for 65% CSR, CFR India. China’s met coke producers have accepted the seventh round of price cut on 29 March in light of sufficient supply and a recent drop in coking coal prices.
Met coke prices in Hebei’s Tangshan were assessed at RMB 1,760/t ($244/t), down RMB 100/t ($14/t) d-o-d. Steelmakers opted for lower coke prices to bolster profit margins.
Despite marginal signs of consumption recovery, the overall downstream steel market continued its downward trajectory. Steel mills predominantly sustained reduced molten iron production levels, further straining coke and coking coal markets.
Pig iron market
Indian pig iron prices remained stable w-o-w and were assessed at INR 37,700/t DAP Durgapur on 29 March. Moreover, prices remained stable w-o-w in the Raipur market and are currently assessed at INR 37,050/t DAP- Raipur.
Outlook
Met coke prices may fall further amid declining coking coal prices and subdued end-user demand. Steel demand remains restrained, contributing to additional price pressure. Looking ahead, the met coke market is expected to remain lacklustre, following the downward trend in the coking coal market.