Indian domestic prices for blast furnace grade metallurgical coke have been edging down on subdued trading amid lockdowns in majority of the states.
Moreover, the country’s steel sector outlook presently appears bleak, given that the resurgent pandemic could result in reduced steel output.
Notably, India’s crude steel production had declined 20% month-on–month (m-o-m) to 8.3 million tonnes (mn t) in Apr’21 and was expected to drop by as much as 30% m-o-m in May’21 amidst reduced demand from retail and auto sectors.
Major automobile manufacturers like Maruti Suzuki, Hyundai, Mahindra, Tata Motors and Hero MotoCorp, reported double-digit declines in sales in May ’21 as the spike in Covid-19 cases and lockdowns across states hit production and dispatches.
On the bright side, however, the ongoing second wave of the pandemic has mildly affected the country’s blast furnace steel production until now, even as most integrated steel mills are providing liquid oxygen for medical use to meet demand from hospitals. However, secondary steel mills were heard to be reducing output citing acute oxygen shortage.
Going forward, it is largely anticipated that steel markets in India would eventually soon withstand the negative impact of Covid-19 as essential businesses were exempted from state-wise lockdown restrictions, reducing the overall steel demand loss, unlike last year when a nationwide lockdown was imposed.
Furthermore, with the vaccination drive gaining pace and a considerable decline in the number of Covid-positive cases, nationwide markets are expected to open up gradually.
Met coke exports rise amidst declining domestic sales
Indian coal traders and producers have been actively looking at export options for better price realisations compared to domestic sales. Market participants strongly anticipate this trend to continue for the next 6-7 months at least.
A total volume of 245,350 tonnes (t) of metallurgical coke has been exported till May’21 to countries such as Vietnam, Brazil, Indonesia, Romania and Oman.
Met coke exports from India during the year so far comprise of 65,250 t to Vietnam, 41,000 t to Brazil, 33,000 t to Indonesia, 27,500 t to Romania and 22,000 t to Japan.
Price assessments
India’s domestically produced met coke prices for the 25-90 mm, blast furnace grade are currently hovering between INR 27,000/t (east coast) and INR 28,000/t (west coast).
Meanwhile, met coke import prices are rising steadily across major originating countries in the Asia-Pacific region, owing to increased import demand from China, for years the world’s largest exporter of metallurgical coke.
CoalMint currently assesses the spot price for the 64% CSR grade blast furnace met coke at $422/t CNF India, up by $2/t on a week-on-week (w-o-w) basis.
The 62% CSR grade BF met coke is currently assessed at $380/t CNF India, unchanged w-o-w.
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