India: Domestic met coke prices rise in recent deals

Met coke prices moved up on import safeguard suggestions
DGFT to discuss recommendations on met coke imports

Indian met coke prices have surged significantly by INR 2,000/tonne (t) to INR 35,500/t ex-Jajpur. This increase is driven by rising demand from buyers and the anticipation of the implementation of Directorate General of Trade Remedies (DGTR) recommendations, which are yet to be enforced.

Met coke prices in western India have edged up by INR 500/t to INR 33,500. Indian met coke production dropped 11% m-o-m in April 2024. Captive production was recorded at 3.37 mnt and merchant producers contributed 0.47 mnt last month.

Indian coke imports have been recorded at 0.28 mnt in April as against 0.22 mnt in March, as per data maintained with BigMint.

Deals for the week

East side-based producer concluded deals for about 10,000-12,000t coke at INR 36,000/t.
The east-based producer concluded a small deal at INR 36,700/t. Offers from few producers were heard to have been picked up above INR 37,000/t levels recently.

Coking coal prices

Australian premium hard coking coal (PHCC) prices picked up w-o-w to $239/t FOB against $235/t FOB a week ago. Prices had picked up during the week by $8/t.

On 21 May, Asian metallurgical coal prices increased in the market due to strong buying interest for July-loading cargoes. Meanwhile, cargoes scheduled for a June laycan remained under pressure because of an ongoing oversupply.

International buyers were bidding higher for July-laycan cargoes, anticipating tighter supply from key Australian miners and increasing demand from Asian end-users. Some sellers have slightly increased their offers following the announcement of China’s new property market stimulus and the ongoing rebound in coking coal futures.

Some overseas market participants also highlighted a lack of support from China due to the recent conclusion of the first round of met coke price cuts. Despite this, several major Chinese steelmakers were observed maintaining their tradable indications steady at $250-$255/mt CFR for Australian prime coal. Some prospective buyers have retreated to the sidelines to assess market direction following the recent met coke price drop.

The Indian market remained largely quiet, with some buyers sourcing small quantities for late June or early July laycans. Indian steelmakers are mostly well-covered until July, so no buyers are in a rush. However, demand pick up is expected by the end of this month or early June.

Imported coke prices

Chinese met coke prices have currently dropped $2/t to around $317/t CFR India.

Demand from India remained uncertain and Indonesian coke sellers were heard to be fulfilling orders beyond the Indian market.

China’s metallurgical coke prices fell as leading steelmakers North China’s Hebei and East China’s Shandong officially announced to trim their coke purchasing prices by yuan 100-110/t ($13.8-15.2/t). The latest cut in coke prices came after steelmakers rejection of an increase in coke prices that coke firms had proposed two weeks ago. The shrinking profit margins have once again dampened production interest, with some coke producers planning to scale back their output. As a result, a shortfall in coke supplies is expected to persist in the near term.

Indian pig iron (steel grade) prices fell by INR 500/t w-o-w to INR 41,800/t Ex-Durgapur on 24 May. Similarly, prices fell by INR 1,000/t w-o-w to INR 42,000/t DAP in the Raipur market.

DGFT to discuss issues raised on recommendations on met coke imports

In a recent update, The Directorate General of Foreign Trade (DGFT) will convene a meeting to address concerns regarding the DGTR proposed imposition on met coke imports. The meeting will be held under the chairmanship of S.K. Sarangi, scheduled on 28 May, 2024, at 12:00 PM in Vanijya Bhawan, New Delhi. The agenda includes discussing the final recommendations by DGTR concerning restrictions aimed at protecting domestic met coke industries and regulating imports. The meeting will also address issues raised by the steel and alloy industries regarding these recommendations.

Outlook

Met coke prices are expected to rise in upcoming transactions. Following the DGFT meeting next week, the market situation should become clearer on price change. Additionally, merchant cockeries may ramp up their production to capitalise on the anticipated price increases.