India became the most preferred destination for Chinese coke exports in H1CY22 (January-June 2022). As per customs data, the country exported 0.65 mnt of met coke to India in the said period. Exports to India fetched China an average income of $553 on per tonne basis.
The rise in exports to India can be attributed to sluggish steel demand in China due to Winter Olympics that had led to curtailment of production in the country’s polluting steel-production units. And also, the resurgence in Covid cases resulted in a slow down in industrial activities.
On the other hand, amid surge in Australian coking coal prices (that touched $650/t levels) this year due to Russia-Ukraine conflict, Indian steel mills opted for buying cheaper Chinese met coke.
In addition, the anti-dumping duty of $25/t that was imposed by Indian government on Chinese met coke imports in 2016 for 5 years was annulled in November 2021, motivating Indian buyers to import the material from Beijing, rather than from other-origins like Japan, Poland or Colombia.
Cumulative exports rise, Japan second largest importer
If we look at the country’s overall met coke exports, the volumes rose by 21% y-o-y in January-June 2022 while export realisations rose by 80% y-o-y to $490 per tonne in the said period.
After India, Japan was the next top export destination at 0.60 mnt with realisation price of $470 per tonne. In fact, Japan turned out to be the net importer of met coke this year as the major met coke producer and supplier, Nippon Steel, temporarily suspended some of the coke ovens at its Kimitsu plant for two years, leading to the shortage in the domestic market. This led steelmakers to increase their reliance on imports to meet their coke requirement.
Brazil was the third largest importer of Chinese coke with 0.59 mnt and an average export realisation price of $581/t.
What lies ahead?
China’s met coke for H2CY22 may see a decline against the first half of the year as global coking coal prices have come down substantially. In addition, sluggish steel demand outlook in India post-export duty imposition on steel is likely to weigh on China’s exports. Global steel demand is also expected to slow down amid inflationary pressure and supply chain woes post Russia-Ukraine conflict.
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