Chinese Met Coke Prices Hits 16-Month Low; Coke Buyers Return on Lower Prices

Chinese met coke prices tumbled to a 16-month low and touched to the level of USD 322/MT, FOB China in the first week of April. Lastly, the coke prices have seen at such level in the month of November 2017.

The Chinese coke market has seen a continuous price cut since mid-March. The major factor behind the continuous price cut is weak demand. Since, mid-March, Chinese steelmakers were not showing any interest in buying due to sufficient inventories maintained as well as continuous fluctuation in prices. Buyers were even reluctant to take positions due to rapidly changing prices in the market.

On average, coke prices for 64% Coke were down by USD 38/MT M-o-M basis. As for the upstream raw material market, domestic coking coal market kept stable with slight fluctuation and seaborne coking coal price functioned amid fluctuation.

In the first week of April, the 64% CSR and the 62% CSR grades are currently assessed at around USD 322/MT and USD 306/MT FOB China respectively, down by USD 10/MT and USD 12/MT from the rates that prevailed in the last week (25 Mar-31Mar'19).

Indian met coke import prices have also seen a gradual fall of around USD 10/MT in a week time. For the 64% CSR and the 62% CSR grades prices are at around USD 335.5/MT and USD 319.50/MT respectively on CNF India basis.

Market participants shared that Chinese coke market was seen continuous price cut since mid-March due to weak demand and sufficient inventories made by Chinese steel mills. However, ongoing VAT adjustment in the price also supported the price cut and leads to falling prices.

The softening seen in the Chinese coke market has also seen the return of International coke buyers. Market participants believe that the prices have returned to competitive levels, and slight buying interest has initiated especially from North East and South East Asian buyers.

The most competitive bid for material containing Chinese 62%/60% coke was offered at USD 295/MT FOB China, but the buyers' tradable value was placed at USD 290/MT FOB China. Still, the market has not gained a much pick up as the gap between offers and bid continued to maintain a wide gap.

With the recent release of data from the European Commission, Co2 emissions in the sectors including ceramics and coke ovens have increased marginally in 2018. Overall EU industrial production grew 1.3% in 2018, down from 3.1% in 2017, which contributed to lower emissions in many sectors across Europe. The total 2018 emissions estimated at 1.684 MnT. The increased Co2 emission has also remained a matter of concern as the Chinese government regularly puts a restriction on the production mills to control the amount of toxic gases released in the atmosphere.

It is expected that April will mark the seasonal peak demand. The demand for raw materials will also see an increase. Meanwhile, government authorities won't lessen environmental inspection in terms of coking industry.