India’s domestic met coke market has been stable since the past two weeks, triggered by lack of demand from the merchant market. Indian steel mills are heard to be sufficiently booked with imported material till December-end, which is resulting in very limited inquiries for domestic coke.
Prices of BF-grade met coke (size 25-90mm) are currently assessed at INR 40,000-40,500/t in both the east and west zones. However, no bookings have been heard at these rates so far.
Chinese met coke cargoes have been booked cheaper, at around $390-400/t CFR India in the past few weeks. This was mainly due to sluggish domestic demand there. However, last week, domestic coke prices in China observed a hike of RMB 100/t ($14/t).
This price hike came amid hike in coal prices there because of a fresh outbreak of Covid which resulted in subsequent restrictions in key coal-producing provinces like Shanxi, Shaanxi, Ordos and Wuhai. This restricted coking coal deliveries once again. The transport barrier further weighed on coke producers who are already reeling under heavy losses. In fact, majority of the met coke plants have cut down production by 30-50% while few have completely shut down their plants.
India: No steel demand revival despite duty removal
The Indian government recently revoked the export duty on steel that was in place for the last six months. However, this did not have any significant impact on exports as global steel demand is already sluggish amid Covid restrictions in China and inflationary pressures in Europe.
India’s domestic steel demand has failed to pick up in the ongoing quarter, despite post-monsoon being the peak season for it.
Domestic pig iron prices are currently assessed at INR 39,800/t exw-Durgapur, down by INR 1,500/t against last week. But HRC prices are stable on a w-o-w basis at INR 56,100/t exy-Mumbai.
The availability of cheaper steel imports from China and South Korea is also limiting domestic steel demand and subsequently mills’ met coke requirement.
What lies ahead?
Australia’s coking coal prices have come down by $70/t in the past one month. Given the sluggish demand for steel globally and at home, any upward revision in domestic met coke prices seems unlikely. On the other hand, Chinese import offers are expected to rise in the coming weeks in line with the hike in domestic offers. Any support to Indian met coke prices seem limited amid sufficient inventory with steel mills.
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