Chinese metallurgical coke export prices have remained unchanged so far this week, but will expectedly keep weakening throughout the coming weeks, amid dwindling demand from steel mills across the wider European market.
European steel demand has plunged as much of the continent’s automotive sector has ceased production in recent days due to the coronavirus outbreak. The automotive industry accounts for 12% of all steel demand.
ArcelorMittal (NYSE:MT), the world’s largest steelmaker, has declared force majeure on raw materials supplied to its European steel mills, per media reports. The move has sparked predictions that many steel companies will likely follow suit as the Covid-19 pandemic worsens.
The news comes as the company has announced output cuts to its European production facilities in response to the spread of the novel coronavirus (2019-nCoV) in Europe, including stopping its Asturias blast furnace in Spain and its 2nd blast furnace at Taranto in Italy, and delaying the restart of its Krakow blast furnace in Poland.
Notably, ArcelorMittal has steel plants in 18 different countries which produced 89.8 million metric tons of crude steel in 2019.
In Europe, several other blast furnaces are operating at low levels of productivity, and are thus consuming less met coke, although pulverized coal injection (PCI) rates may remain strong with relatively low prices for PCI maximizing met coke replacement where possible.
Notwithstanding the grimness of demand outlook for steelmaking raw materials at the world’s major economies, Chinese coke-making industries are gradually resuming production work. Accordingly, demand for seaborne coking coal should rise in the second quarter, according to trader sources.
PRICE ASSESSMENTS
Chinese metallurgical coke export prices for the 64% CSR and the 62% CSR grades are assessed at around USD 286.00/MT and USD 269.00/MT FOB China respectively.
Indian metallurgical coke import prices for the 64% CSR and the 62% CSR grades amount to USD 299.00/MT and USD 282.00/MT respectively on CNF India basis.
Currently, India’s domestically produced metallurgical coke prices for the blast furnace grade are hovering at around INR 22,500/MT and between INR 22,500-23,500/MT in the country’s east and west coast regions respectively.
Source: CoalMint Research
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