Chinese Met Coke Export Prices Dip amid Rapid Spread of COVID-19

A slowdown in downstream steel production and demand is evident in major steel producing countries, as global commodities markets grapple with a worsening corona virus pandemic.

The outbreak of the corona virus epidemic in China -- the world's second-largest economy, responsible for almost a fifth of global GDP -- is having a significant impact on commodity markets, as trading patterns are disrupted and economic growth forecasts are revised lower.

The weaker steel demand, as end-users close plants to deal with reduced activity, has increased uncertainties across the wider European market. In Europe, several blast furnaces are operating at low levels of productivity, and are thus consuming less met coke, according to sources. Meanwhile, PCI injection rates may remain strong with relatively low prices for PCI maximizing met coke replacement where possible.

Similarly for the Chinese domestic met coke market, four rounds of price cuts have materialized, and trading sources are concerned if there would be a fifth round. Offers for Chinese domestic met coke of all grades have dropped at the country's major coal-handling ports, reflecting the fourth round of price cut. However, prices for weaker grades of met coke at the ports have dropped faster due to weaker demand for these types of met coke.

Indian met coke buying sentiment is also bearish as the corona virus crisis has affected the economy and reduced raw materials demand from downstream steel sector.

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