India: Domestic met coke prices rangebound, imported cargoes offerings rise

Met coke prices in India, especially in the eastern region, have been largely stable over the past three weeks. The price for BF grade coke (25-90mm) is currently assessed in the range of INR 44,000-45,00/t ex-Jajpur.

Domestic met coke producers booked till Sept-end

Indian met coke producers in the eastern belt are heard to be booked for their previous orders either till end-September. Coke ovens of a few major steel mills are under maintenance since the last few months and so domestic coke producers are fulfilling their requirements. This has resulted in low spot availability of domestic met coke in the market, giving an edge to domestic coke producers.

Consistent Australian coking coal prices

Australian coking coal prices have remained largely unchanged in the past few weeks, only dropping by $20/t yesterday. This has come with global buyers taking a backseat amid sluggish downstream steel demand.

Steel giant Arcelor Mittal has recently suspended operations at its two blast furnaces in France, one in Poland, Germany, and Spain due to unfavourable global market conditions as energy prices and carbon costs are soaring.

Increased imported met coke availability

Amid muted steel demand especially in Europe, there is increased availability of met coke at competitive rates in the Indian market. Chinese coke (64% CSR) is being offered at $435-440/t CFR India, while Indonesian (62% CSR) coke is at $420/t CFR, and Polish coke (64-64% CSR, 1% moisture, 10% ash) prices are at $420-425/t CFR.

However, despite these prices being cheaper against domestic met coke offers, not much buying interest is seen in the Indian market because of quality and under-sizing issues.

"We use a blend of imported and domestic met coke, but few imported vessels that are available in the market are being offered for bulk purchases. This is why we are in wait-and-watch mode and would buy if offered relatively smaller quantities or offers are lowered further, as demand looks bearish going ahead," said a buyer source based in eastern India.

Indian steel demand sluggish

Inflationary pressure and the export duty on steel continues to weigh on Indian domestic steel demand. Steel grade pig iron prices have come down by INR 4,000/t m-o-m in September and are currently assessed at INR 45,000/t exw-Durgapur, while HRC prices have come down by INR 1,100/t to INR 56,100/t exy-Mumbai.

Outlook: Met coke prices to fall

The recent drop in imported Australian coking coal prices of $20/t and the chances of further downtrend in coking coal prices are set to put some pressure on domestic met coke prices in the upcoming days, making its prices come down by INR 2,000-3,000/t, as per CoalMint's analysis.