The Asian seaborne metallurgical (met) coke market continued witnessing lacklustre demand with limited trade deals being concluded, and prices falling by $26/tonne (t) on the week, owing to two main factors.
- Lowered met coke production costs, resulting from the ongoing decline in coking coal prices, imported from Australia (down 14% w-o-w) and USA (down 7% w-o-w).
- Slowdown in met coke imports by China, as Chinese coke prices finally started to weaken in November, with coal supply tightness easing and steel margins turning negative.
That apart, Indian buying interest in seaborne met coke declined as end-users were heard to have had adequate stock in-hand.
Moreover, with import prices consistently being higher than the domestic prices, Indian buyers were reluctant to pick up seaborne cargoes.
CoalMint assessed the Japan-origin blast furnace (BF) grade met coke, with 64% coke strength after reaction (CSR), at $629/t CNF India, down by $26/t (4.0%) on a w-o-w basis.
Japanese 62% CSR BF grade met coke price is assessed at $597/t CNF India, also down by $26/t (4.2%) w-o-w.
Columbian ultra-low phosphorus (ULP) nut coke import prices continue hovering around $570-580/t CNF India, amidst stable domestic demand and optimum capacity utilisation by ferro alloy plants in India.
Bearish sentiments prevail in China’s met coke market
Domestically produced met coke prices in China have undergone seven rounds of consistent declines, totalling RMB 1,500/t ($235/t), since the beginning of Nov’21.
Although these price reductions had been accepted by the coking plants, some of them have recently objected to any further price cut proposal in view of recovering demand from steel mills.
Nevertheless, Jinan Steel Group, one of China’s leading steelmakers based in Hebei province, has proposed the eighth round of price reduction for met coke by RMB 200/t on 26 Nov’21.
Australian coking prices plunge on weak end-user demand
Australian premium low-volatile hard coking coal price decreased by almost $50/t, or 13.5% this week, to $316.50/t FOB amid subdued demand despite the prevailing weather-induced supply tightness in Australia.
Trading activity remained thin as most end-users stayed on the sidelines, showing no urgency to transact in the short term due to the recent volatility.
Outlook
Indian restocking demand for seaborne met coke is expected to remain tepid as most end-users have largely withdrawn from the spot market amid relatively lower-priced domestic material availability alongside weaker margins for pig iron producers.
Indian merchant met coke manufacturers are reducing their offer prices to entice buying interest in a relatively softer market wherein pig iron producers are reluctant to accept high-priced met coke.
Subsequently, imported met coke prices are likely to continue their downtrend in December as a result of steel output curbs in China, leading to reduced met coke import demand from the world’s largest met coke consumer.
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