- Tight supply and rising import costs are supporting met coke prices
- Higher prices may face buying resistance, limiting further gains
India’s domestic met coke market witnessed a sharp upward movement in the week ended August 20, supported by a combination of tighter availability, improving downstream demand and a significant increase in imported coke and coking coal costs.
BF-grade met coke prices in eastern India rose by INR 500/t to INR 35,800/t ex-Jajpur, while western India prices increased by INR 300/t to INR 33,800/t ex-Gandhidham. Foundry-grade coke prices also advanced by INR 200/t to around INR 36,600/t ex-Rajkot. The price gains indicate a strengthening cost structure across the domestic coke market, with sellers showing greater reluctance to release cargoes at prevailing levels.
Supply tightness and higher replacement costs support prices
The recent rise in domestic met coke prices is primarily attributable to the widening replacement cost of imported raw materials and finished coke.
A market participant noted that “Rising international coking coal prices are particularly significant for merchant coke producers, as coal constitutes the dominant component of coke production costs. Recent global supply disruptions and higher freight and insurance costs have further increased the delivered cost of imported coking coal into India.”
Imported coke turns costlier, strengthening domestic parity
The imported met coke market has also moved higher, reinforcing the upward bias in domestic prices. Indonesian BF-grade met coke (65/63 CSR) increased by $5/t w-o-w to around $313/t CFR India, while higher FOB offers from Indonesian suppliers have been accompanied by elevated freight costs. Disruptions and uncertainty around the Middle East shipping corridor have contributed to higher freight costs, increasing the landed cost of imported material.
As imported coke becomes more expensive, domestic merchant producers gain greater pricing support, particularly when domestic availability remains relatively constrained.
Coking coal surge raises pressure on merchant cokeries
The sharp increase in seaborne coking coal prices has emerged as a key driver for the domestic coke market. Australian premium hard coking coal (PHCC) prices rose sharply by $21/t w-o-w to $245/t FOB Australia, supported by improved Chinese buying interest following supply disruptions in Shanxi.
A market participant learned that “For Indian merchant cokeries, higher imported coal prices directly increase conversion costs & reduce operating margins unless coke prices rise proportionately. Consequently, producers are likely to remain active in securing raw material requirements. This could result in a gradual shift in the sourcing mix as buyers seek to optimise the cost and quality balance of their coke blends.”
China market provides additional global support
China’s coking coal market remained stable to slightly firm, with strict mine-safety controls, constrained domestic supply, higher auction prices and renewed downstream restocking providing support. Mongolian coal prices also strengthened amid lower port clearances and restricted availability.
Meanwhile, Chinese coke producers have initiated the first round of Yuan 50-55/t ($7-8/t) price increases, reflecting the pressure created by higher raw coal costs and improving blast furnace demand. The firming Chinese market is important for the global seaborne market because stronger Chinese procurement can increase competition for Australian and other high-grade coking coal supplies.
Pig iron prices follow the upward cost trend
India’s domestic pig iron market also showed a moderate improvement, with Durgapur prices rising by around INR 250/t w-o-w to INR 38,550/t ex-works. The increase reflects the broader improvement in the ferrous raw-material cost structure, particularly higher met coke prices.
At the same time, expectations of stronger export opportunities under the advance-licence mechanism could provide additional demand support for merchant pig iron producers. However, the ability to pass higher coke and coal costs through to pig iron prices will remain dependent on domestic steel demand and export realisations.
Outlook
India’s met coke market is expected to remain firm in the near term, supported by higher import costs, tight domestic availability and improving pig iron demand. However, elevated prices may face buying resistance, limiting the pace of further gains.
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