India: Met coke import prices shoot up on robust demand in ex-China markets

India's metallurgical (met) coke import prices have increased moderately over the past week amidst continued tightness in global supply resulting from persistently high demand in China.

However, Indian demand for seaborne met coke has remained largely subdued in recent months as most buyers refrained from importing spot material due to relatively softer domestic prices and ample material availability within the country itself.

CoalMint assessed the blast furnace (BF) grade met coke, with 64% coke strength after reaction (CSR), at $454/tonne (t) CNF India, up by $6/t (1.3%) on a w-o-w basis.

The 62% CSR BF grade met coke price increased by $13/t (3.2%) w-o-w to $420/t CNF India.

Indian domestic met coke prices for the 25-90-mm BF grades are currently ranging between INR 29,500-30,500/t along the country's east and west coasts respectively.

The latest price of domestic met coke, with 12.5% ash content, in North China is assessed at CNY 2,970/t ($466.31/t), up by CNY 170/t ($25.63/t) on the week.

Fourth round of coke price uptick accepted in China

In the Chinese domestic met coke market, the fourth round of price uptick by CNY 120/t, has been widely accepted by major steelmakers in Shandong and Hebei provinces in North China, thus bringing the total uptick to CNY 480/t since early-Aug'21.

Market participants anticipate that a few rounds of coke price hikes could be expected on the back of rising production cost and reduced supply availability amid ongoing environmental inspections.

However, outlook on coke prices in the longer term is presently uncertain as downstream demand is subjected to steel mills' buying interest following governmental policies on production cuts.

Resurgent pandemic induces supply worries for coking coal, coke in China

Earlier this month, a recent coronavirus outbreak in the country had sparked supply concerns for the steelmaking raw materials.

In early-Aug'21, China reported the most new locally transmitted Covid-19 cases since Jan'21 as some cities stepped up restrictions, curtailed flights and increased testing to contain the outbreak driven mainly by the Delta variant.

The redeveloping coronavirus situation had been affecting the turnover rate of met coke and arrivals at steel mills.

The renewed upsurge in the pandemic situation is likely to affect the turnover rate of coke and arrivals at mills, apart from prices thereof. The recent outbreak might also delay coking coal transportation.

Furthermore, air pollution control measures are still affecting production and underpinning prices for domestically produced met coke in China.

Outlook

India-bound seaborne met coke prices are likely to stay at elevated levels in view of the supply tightness resulting from China's absence from the Asian export market.

Indian coke buyers are largely expected to stay out of the seaborne market as domestic prices are comparatively lower than the international prices, which have driven Indian coke exports lately.