Colombian Met Coke Output Drops, Market Conditions Become More Challenging

Colombian metallurgical coke producers have reduced output in recent months, adjusting to lower seaborne demand and prices.

Local market participants estimate that Colombia’s met coke production capacity — which stood at 3.5 MnT/year last year — has been cut by 500,000 MT as plants turn off certain ovens, in some cases because of maintenance work.

Multiple sources said production cuts are being implemented by some companies including Coquecol, Minercoque and Pinzon Martinez.

“In January, companies produced met coke and could not sell some of it. In the second month, they continued to produce and once again stockpiled coke. In the third month, they didn’t have space to keep stockpiling or cash to continue buying coking coal. This resulted in a situation that has forced producers to turn off ovens,” one market participant said.

Coquecol has turned off some ovens with a combined capacity of 70,000 MT/year in the municipality of Cucunuba. The company pointed to tighter environmental regulations, which have forced it to take this step. Coquecol restarted these ovens in 2017 to take advantage of rising seaborne met coke prices.

Coquecol also restarted an idled coke battery in January in Samaca, which added a further 70,000 MT/year to its met coke production. The firm is estimated to have met coke production capacity of 250,000 MT/year, including idled ovens.

One of the company officials mentioned some of its met coke production facilities are offline for maintenance.

Yilcoque – which is owned by Turkey’s Yildirim Holding – has announced that they have no plans to reduce output and continues to produce around 14,500 MT/month of coke, requiring 23,500 MT/month of coking coal.

With met coke market conditions becoming more challenging, Colombian producers have pushed for lower domestic coking coal prices, with market participants noting steep cuts recently.”Coke companies have become more demanding. Nowadays, they want coking coal with a maximum of 10% ash content when previously they would take 12%,” a coking coal producer said.