India: Domestic met coke offers rise by INR 2,000/t, buyers show reluctance
Domestic metallurgical (met) coke offers have risen by INR 2,000/t w-o-w basis both in eastern and western regions of India. However, deals at the increased levels have n...
Domestic metallurgical (met) coke offers have risen by INR 2,000/t w-o-w basis both in eastern and western regions of India. However, deals at the increased levels have not been concluded till the time of publication.
| Product | Grade | Jan'22 W3 | Jan'22 W4 | Change |
| Met coke, ex-Cuttack | BF grade 25-90 mm | INR 48,000 | INR 50,000 | + 2000 |
| Met coke, ex-Surat | BF grade 25-90 mm | INR 46,000 | INR 48,000 | + 2000 |
| Coking Coal, FoB Australia | Low Vol-Hard coking | $426 | $444.5 | +19 |
| Pig Iron, Exw-Durgapur | Steel grade | INR 44,200 | INR 45,300 | - |
Buyers' stance:
Indian merchant pig iron producers are showing reluctance in increasing offers and have adopted the wait-and-watch mode because of unaffordability and hopes of price correction in the upcoming days.
Australian coking coal prices, which rose by $19/t last week, remained largely stable this week, giving hope to the buyers that coking coal supplies would improve with the reduction in rainfall in February.
"Many merchant pig iron producers have reduced their utilisation rates and small furnaces have shut down given the high raw material costs and not-so-buoyant steel demand. Producers are waiting for some correction in prices," said a met coke buyer based in Kolkata.
Sellers' stance:
Majority of the met coke sellers are not ready to go down below the quoted offers due to the ongoing coking coal shortage. They are of the opinion that the coking coal supplies would only improve by Mar-Apr and this stability in prices this week is temporary ahead of the Chinese New year holidays starting next week.
Large steel manufacturers in India are running low on their coking coal inventory and would come in the merchant met coke market in the upcoming days to keep their blast furnaces running.
Australian coking coal price remains firm
Australian coking coal prices remained more or less stable throughout the week. This stability is because global buyers have taken a backseat due to high prices. Also, US-coking coal prices have turned stable ahead of the Chinese Spring festival holidays. However, no correction was observed as supply tightness continued from Australia. Wet weather continued to hamper supplies as Australia's Bureau of Meteorology reported rainfall of up to 200 mm in the key mining regions of eastern Queensland.
Outlook
According to CoalMint analysis, buyers would have to accept met coke offers at these increased levels only as the coking coal supply crunch is expected to continue for at least a month or so. However, met coke prices are likely to stabilise at INR 50,000-52,000/t because any rise beyond this would severely hamper the margins of pig iron producers, compelling them to suspend operations.
