India: Domestic met coke prices remain elevated, few buyers opt to import

The domestic met coke prices in India continue to remain elevated especially in the eastern belt as the demand in merchant market is comparatively higher against the supplies. While no major deal was heard this week, the offers for BF grade coke (64% CSR, 25-90mm) are currently assessed at INR 45,000-45,500/t ex-Jajpur.

The Indian met coke producers are holding up their offers as there is increased demand in the merchant market with major steel mills like JSPL, RINL, SAIL-IISCO present in the market for buying. The reason being their coke oven plants are under maintenance.

However, on supply side, the reputed manufacturers are busy either fulfilling previous orders or meeting requirements of the bulk orders. Like recently, Tata Steel has booked a bulk quantity (more than 40,000 tonne) of domestic met coke from two reputed suppliers, for its NINL (Nilachal Ispat Nigam Ltd) plant in Jajpur, Odisha.

Given the quality of domestic met coke, improved demand and higher coking coal prices, domestic met coke producers are reluctant to lower their offers, informed market participants.

"The coking coal being used for met coke production currently was bought at an average price of $400/t. The conversion cost of the same comes at around INR 52,000-53,000/t. We are still selling coke in the domestic market at a loss of INR 6,000-7,000/t which makes it quite difficult for us to lower down the offers", quoted a coke manufacturer based in east.

With regards to imported coke, Chinese (64% CSR) and Indonesian (62% CSR) met coke is being offered at $475/t and $450/t CFR India basis (east coast). In fact, few Indian steel players have booked the same for September arrival.

As per the market participants, Indian buyers are either opting for imported material completely or are choosing to use the blends of imported and domestic. But there are few who are avoiding it given the quality and under sizing issues, which is also providing support to domestic met coke prices.

Coking coal prices remain elevated

The Australian coking coal prices that have risen by $80/t in last three weeks of August, rose by $10/t this week and is currently assessed at $278/t FoB basis. The elevated thermal coal prices, marginal increase in coking coal inquiries in the global market and the possibility of supply disruptions due to heavy rainfall alert in Australia in upcoming days is supporting the country's coking coal prices.

What lies ahead?

The domestic met coke prices in India are likely to remain supported amid the ongoing demand-supply imbalance. However, amid cheaper availability of imported coke, may restrict any further increase in domestic coke prices, CoalMint notes.