After touching INR 40,000/t in the last two weeks, domestic met coke prices rose again by INR 4,000-5,000/t in line with improved demand from the merchant market and the uptrend in Australian coking coal prices.
The current price for BF grade (64% CSR, 25-90mm) met coke is assessed at INR 45,000/t in the eastern region, while in west prices are at INR 48,000-49,000/t.
On the demand side, there is requirement of about 105,000 tonnes (t) of coke in the merchant market by key steel mills such as RINL, SAIL, Tata Steel and JSPL. There is no competition from Chinese coke suppliers at present as there has been an improvement in demand for coke from end-users in China.
In fact, the country saw the first round of domestic coke price hike of RMB 200/t ($30/t) after five rounds of cuts over the last two months. This has enabled Indian coke manufacturers to raise their offers.
Many Indian steel mills that had put their plants on maintenance post the government’s decision to impose export duty on steel in the last week of May have resumed operations. Also, with the monsoon supposed to cease next month, steel mills are ramping up production resulting in increased coke demand.
Australian coking coal prices rise
On the other hand, the rise in Australian coking coal prices this week has been an enabling factor for Indian met coke producers. Premium hard coking coal prices rose $42/t w-o-w and are currently assessed at $230/t FOB Hay Point.
This rise in coking coal prices is mainly due to improvement in steel demand across the globe and especially India. The steel mills are back in the market to replenish their coking coal stocks after a lull of about two months, resulting in increased enquiries. In fact, in July India’s imports of coking coal fell to a six-month low at 4.12 mnt.
In addition, Australian coking coal supplies are also heard to be limited at present. “Only BHP is selling cargoes in the spot market, as other miners are either booked for LTAs or are currently not offering in the market. Thus, limited supplies have also given a push to Australian coking coal prices”, a major Indian importer source said.
Near-term projection
It is being anticipated that Australian coking coal prices would rise up to $275-300/t FOB basis and domestic met coke offers are expected to rise to INR 48,000-50,000/t. With a positive demand outlook for the steel sector, a further spurt in domestic met coke prices looks inevitable in the near-term.
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