India’s metallurgical (met) coke import prices have remained mostly steady so far this month after having risen relentlessly over the past months amidst continued supply tightness resulting from persistently high demand in China.
In India, demand for fresh seaborne materials remains tepid as end-users have largely withdrawn from the spot market amid relatively lower-priced domestic supply alongside weaker steel margins.
CoalMint assessed the blast furnace (BF) grade met coke, with 64% coke strength after reaction (CSR), at $685/tonne (t) CNF India, unchanged on a w-o-w basis.
The 62% CSR BF grade met coke price is also unchanged w-o-w at $653/t CNF India.
Columbian ultra-low phosphorus (ULP) nut coke import prices are presently hovering around $580-590/t CNF India, amidst increasing domestic demand and optimum capacity utilisation by ferro alloy plants in India.
Chinese met coke prices soften
In China’s domestic met coke market segment, several steel mills in the country’s northern Hebei province announced the third round of price decreases by CNY 200/t ($31/t) on 10Nov’21, citing weakening domestic coking coal market and low steel mill profit margins.This would bring the total price cut to CNY 600/t since early Nov’21.
The recent drop in Shanxi-origin coking coal prices and steel mills’ production restrictions, as well as tightening margins, all contributed to the downtrend in coke prices. Meanwhile, Chinese steel mill margins were downward since Oct’21 as downstream demand slowed down.
The latest price of domestic met coke, with 12.5% ash content, in North China is assessed at CNY 4,110/t ($647.71/t), down by CNY 200/t ($32.28/t) on the week.
Major mills in China’s Shandong province might also announce their price adjustment plans soon, and coke plants might have very limited bargaining power as coking coal prices are declining sharply, according to industry sources.
Market participants are largely expecting that a few more rounds of met coke price corrections could be expected as downstream demand is subjected to steel mills’ buying interest following stringent governmental policies on production cuts.
Outlook
The weakness in global seaborne coking coal prices and softer downstream demand could continue to pressure coke prices in the near run. Steel margins are shrinking and with foreseeable weakness in downstream demand, coke prices are likely to fall further.
Indian coke buyers are largely expected to stay out of the seaborne market as domestic prices are comparatively lower than international , which have driven Indian coke exports lately.
Nevertheless, Indian steelmaking and thus imports of both coking coal and met coke are expected to rebound, rising slowly in the final quarter of CY’21 and more rapidly from early CY’22, as per Australia’s Department of Industry, Innovation and Science.
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