India: BigMint's coking coal index drops by $6 in a recent deal

• Domestic met coke prices in India stabilize following an earlier hike this month
  
  
• Australian coking coal prices remain range-bound
  
  

BigMint's premium hard coking coal (PHCC) index was assessed at $208.5/tonne (t) CNF Paradip, India, on 15 January 2025 against $215/t CNF on 31 December.

There have a been a couple of deals concluded from Australia to India in a week's time, quoted a trader source.

Australian coking coal shipments remain limited, prompting sellers to set expectations around $218-220 CNF India. However, buyers are targeting lower levels of $207-208 CNF, highlighted another trader source.

Rationale:

BigMint's coking coal index is derived using data points, i.e., trades, offers, and bids.

An Indian mill booked a part shipment of approximately 55,000t of Goonyella cargo at $196/t FOB, equivalent to $208-209/t CFR India, for delivery at the end of February 2025. This has been considered for price calculation and given a weightage of 50%

Nine (9) firm offers, bids, and indicative prices were heard. Out of this, seven (7) were considered for price calculation and given 50% weightage.

Factors impacting coking coal import prices

Australian coking coal prices remain rangebound - Australian coking coal prices remained range-bound w-o-w. PHCC was assessed at $194/t FOB Australia. Limited buying interest and fall in steel prices kept bids under pressure.

Indian met coke prices stabilise after rising earlier in the month - India's domestic met coke prices inched up by INR 400-800/tonne (t) last week week. As per BigMint's assessment, the 25-90 mm blast furnace (BF) grade stood at INR 32,800/t exw-Jajpur, while Gandhidham's prices were at INR 28,800/t. Domestic producers had lifted offers significantly to INR 34,000-36,000/t exw in eastern India last week following the announcement of quarterly quota import restrictions. However, the entire quantum of the hike could not be absorbed, and hence, marginal hikes were seen.

Chinese steel mills press for 7th straight coke price cut - China's met coke market faces a potential seventh price cut amid a persistent supply glut. Prices have already dropped by RMB 300-330/t ($40-45/t) across six rounds since late October, but slow steel mill purchases continue to hinder destocking, leaving coke inventories elevated at coking plants, according to market sources.

Outlook

Overall, mills expect market prices to gradually rise, driven by seasonal disruptions such as Australia's monsoon and extended shipping times from alternative sources like the US, Colombia, and Canada. Additionally, the anticipated imposition of safeguard duties on steel is likely to further boost demand and support price increases. However, acceptance of price hike remains a concern.