- Pig iron prices decline in recent auctions
- Higher coking coal tags fail to lift coke prices
Met coke prices in eastern and western India remained largely unchanged this week amid the absence of significant trade activity due to sluggish demand from steelmakers and falling prices at pig iron auctions.
According to assessments by BigMint, 25-90 mm blast furnace (BF) grade coke was at INR 32,300/tonne (t) ex-Jajpur, while prices in Gandhidham held steady at INR 31,000/t exw, supported by localised buying interest.
Commenting on the prevailing market conditions, a producer stated, “The domestic met coke market remains stagnant, with limited trading activity observed due to persistently low demand. Not many firm bids were heard in the market.”
Coking coal prices rise since mid-Apr amid tight supply, but met coke unaffected
Notably, Australian coking coal prices have risen by $9 since mid-April. Despite this increase in input costs, Indian met coke producers have not been able to push up their prices and pass on increased costs, primarily due to the continued weakness in the steel sector, which has limited procurement activity.
However, Australian premium hard coking coal (PHCC) prices remained unchanged w-o-w at $191/t FOB Australia, supported by balanced global demand.
Steel market weakness pressures coke, raw material demand
The Indian steel market continued to experience subdued sentiment last week, which has directly impacted the demand for raw materials such as met coke and pig iron. BigMint’s India Steel Composite Index declined for the third consecutive week, falling 0.6% w-o-w to 136.7 points on 16 May. This is its lowest level in two months.
Within product categories, the long steel index recorded a 0.8% w-o-w drop, with wire rods seeing the sharpest decline of 1.7%. The flat products index experienced a smaller decrease of 0.4% w-o-w, supported by modest price gains in hot-rolled (HR) plates and galvanised plain (GP) coils.
Indian pig iron prices drop in auctions amid tepid buying interest
The steel sector’s weakness continued to weigh on pig iron prices. In SAIL-RSP’s 19 May auction, only 1,900 t of 8,000 t were booked at INR 32,000/t exw, down INR 800/t from the previous auction.
NMDC’s 14 May auction saw limited interest, with 4,500 t of 10,000 t sold at INR 32,500/t, compared to INR 33,000/t on 5 May. Meanwhile, spot prices in Durgapur rose slightly by INR 100/t d-o-d to INR 33,000/t, likely driven by local restocking.
China’s coke prices dip amid surplus supply, cautious buying
In contrast to India, China’s met coke market saw a downward correction last week, the first in recent times. Prices fell by RMB 50-55/t amid rising inventories, cautious steel mill procurement, and expectations of lower seasonal demand.
Portside sentiment remained bearish, and further downside risks persist due to falling coal costs and an expected summer slowdown.
Outlook: Stable but cautious market ahead
Despite rising coking coal prices, met coke prices in India are likely to remain range-bound in the near term due to muted steel demand. The steel sector’s continued underperformance is acting as a cap on potential price increases. Unless there is a substantial recovery in steel consumption or a disruption in coke supply, prices are expected to remain under pressure.
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