India: Domestic met coke prices hold firm amid healthy demand

India's domestically produced metallurgical coke prices have remained unchanged for the past few weeks, supported by stable demand from the domestic steel industry.

Overall buying interests among market participants are presently "stable with an upside" according to most traders.

However, met coke import prices are rising steadily across major originating countries in the Asia-Pacific region, owing to increased import demand from China.

Imported coke prices are rising on surging demand from China

In China, domestic coke supply has tightened with coking coal shortage and widespread capacity cuts limiting production, while coke demand stayed relatively firm due to full-fledged blast furnace capacity utilization at steel mills.

The recently rumored ban on Australian coal imports has aggravated the coking coal shortage in China, while the appreciated Yuan is attracting buyers to opt for higher imports of met coke.

The resultant stronger Chinese import demand for met coke has created availability tightness in the global met coke market, with a severe supply shortage expected to continue in the coming months.

Indian steel demand recovery support import demand for met coke

The Indian spot demand for imported met coke has improved amidst the steady recovery in demand growth from the domestic steelmaking industry.

The country's large-scale integrated steelmakers - with captive iron ore mines, downstream facilities and easier access to export markets - have increased blast furnace operations to optimum levels.

A surge in demand from the automotive and white goods sectors and moderate activity in government infrastructure projects are driving the recovery in domestic demand for steel products in India. Steel mills are heard fetching their full contracted term volumes while some are even heard to be seeking cargo advancements.

Ex-China suppliers boost met coke exports as Indian buyers diversify sources

India-based trading firms, and major steel-producing end-users like ArcelorMittal Nippon Steel, have started relying on alternative source countries such as Poland, Colombia Japan, Indonesia and Russia for their met coke supplies.

Higher domestic coking coal prices in China have pushed up the country's met coke export prices to such high levels which are incompetent against other exporting nations as well as Indian domestic merchant coke makers.

Indian imports of blast furnace (BF) grade met coke mostly originates from Japan, prices thereof currently being around $300-305/t CNF India for December-loading cargoes.

Poland-origin BF coke is mainly consumed by the Chinese end-users, while it is imported in India solely by ArcelorMittal -- prices being at around $302-304/t CNF India.

Both Colombian and Indonesian met coke prices are currently assessed at around $295-300/t on CNF India basis.

Indian domestic met coke prices of the 25-90 mm, blast furnace grade are currently assessed at around INR 23,000/t (east coast) and INR 23,500/t (west coast).

India Coal Import Vessel Lineup

CoalMint's latest vessel lineup data (as on 2 Nov'20) reveals that an aggregate shipment volume of 95,870 t of imported met coke is expected to reach India by this week -- 27,500 t at Vizag, 24,370 t at Haldia and 44,000 t at Krishnapatnam port.

Notably, all of these inbound met coke consignments have been sourced from different countries, other than China, viz. Indonesia (27,500 t) and Poland (68,370 t).