India: Domestic met coke market faces pressure amid sluggish demand

• Met coke prices are under pressure on falling met coal prices
  
  
• Imported met coke prices cost competitiveness continue over domestic offers
  
  

Domestic met coke prices in India remained almost in line with last week's prices at INR 34,800/tonne (t). ex-works Jajpur. Some merchant producers were reportedly offering prices above INR 35,000/t. Meanwhile, Indian met coke prices in the western region remained stable during the week at INR 32,700/t. In the southern market, prices continued to be on lower side with about 30,000-31,000/t levels delivered basis.

In discussions with market participants, BigMint learned that a few merchant cokeries have shut down operations due to declining market conditions in India. Additionally, some end-users have reportedly reduced their output, while sellers are hesitant to lower their offer prices. Deals in the market were very rare, only deals heard were of below 200 t met coke quantity. The bid-offer disparity inhibited deals from taking place. Fall in steel prices on weaker demand amid monsoon and price pressure from imports have weighed on domestic met coke prices.

Imported met coke offers to India remain under pressure

Imported met coke offers to India have continued to remain under pressure. Steel mills are hesitant to act as direct consignees or importers due to unresolved quota restrictions clauses.

Currently, the price indication for inferior quality with lower mean size $285-290/t CFR India, while for higher quality coke (with a mean size greater than 50mm and low moisture content), it is $305-315/t CFR India, depending on the vessel freights and size of the vessel.

Chinese coke prices drop

On 29 July, leading steelmakers in North China's Hebei and East China's Shandong declared to independent coke firms that they were reducing their met coke purchase prices by yuan 50-55/t ($6.9-7.6/t) due to quite weak steel prices. The same week saw another price reduction of the same after leading steelmakers pressed the coke makers for another cut, marking a total reduction of yuan 100-110/t in just one week.

The diminishing cost support and weak demand have fuelled market expectations that domestic mills may soon push for another round of price cuts.

On the demand side, sluggish purchases of coke by downstream mills have added further downward pressure on prices. The combination of weak finished steel prices and low transaction volumes has continued to erode mills' margins, reducing their demand for feed materials.

Coking coal prices fall

Australian premium hard coking coal (PHCC) prices dropped by $2/t w-o-w to $214.5/t FOB w-o-w.

Some market participants continued to observe prices under pressure, as buying interest from Indian steelmakers remained limited to small volumes, with most mills covered for the monsoon period.

India-bound coking coal cargoes are more than sufficient for current demand, further buying seems limited.

Also, there seems to be ample supply in the market to meet any buying demand, including new September supplies to be released by a major Australian miner.

Outlook

The Indian met coke market is expected to remain under pressure in the coming weeks, driven by weakening demand from steelmakers and the continued decline in coking coal prices. The outcome of the upcoming inter-ministerial meeting on import restrictions could significantly impact market dynamics, particularly if changes to import quotas are implemented. Market conditions are likely to remain challenging, with limited opportunities for price recovery in the near term.