India met coke prices face downward pressure on lower bids

• Met coke prices under pressure from better import offers
  
  
• China to announce fourth round of price cut
  
  

Domestic met coke prices in India remained unchanged this week at INR 34,800/tonne (t). ex-works Jajpur. Merchant cookeries were heard offering at INR 35,000 levels. However, in talks with market participants, BigMint learned that lucrative imported prices led to domestic cookeries preferring buying imported coke. Also, in line with it cookeries have also reduced production to suffice losses in current met coke market scenario.

BigMint gathered insights from market participants revealing that several merchant cookeries in India have halted operations due to unfavorable market conditions. Additionally, some end-users have reduced production, while sellers remain reluctant to reduce their offer prices. The drop in steel prices, driven by weaker demand during the monsoon season and competitive pressure from imports, has further depressed domestic met coke prices. Additionally, BigMint has gathered insights from West Coast mills suggesting that prices could potentially decline in the near term.

Deal for about 25,000 t met coke was heard to be concluded by east side based producer at INR 35,000-35,500/t levels. Another producer was heard to have sold 8,000 t coke at INR 35,000/t levels. A west side producer also concluded about 4,000 t coke at INR 32,000/t levels recently.

Chinese coke prices drop

Market sentiment remained weak, with limited buying interest observed across major markets, while reselling activity by end-users continued to stay active.

Some Chinese mills in the Hebei region Xingtai and Tianjin area, have proposed price drop by RMB 50-55/t ($6.99-7.69/t) effective from 15th August.The price for wet quenched met coke to be reduced by RMB 50/t, and for dry quenched met coke by RMB 55/t. Third round of price cut landed on 12th August, drop of RMB 50-55/t.

coke seller noted that coke prices might be approaching a bottom, as Indonesian cokeries are already incurring losses. A rise in demand is anticipated from India, Europe, and Southeast America for cargoes scheduled to load between October and December.

In terms of demand, sluggish purchases of coke from downstream mills also added more downside pressure on coke prices. Weak finished steel prices and low transaction volumes continued to hurt mills' margins and dented their appetite for feed materials

The demand outlook for coke stayed bearish in the near term due to steel mills output cut plans, indicating that the fundamentals for coke market could worsen further,.

Coking coal prices fall

Australian premium hard coking coal (PHCC) prices dropped by $8.5/t w-o-w to $206/t FOB w-o-w.

The prices continued to fall on week market sentiments and falling Chinese demand. Buying indication kept falling and end users were limited to need based buying in absence of any firm demand. Also, further price drop expectations kept buying subdued.

Indian buyers refrained from further rpurchase amid low demand. Prices are expected to touch lower levels amid absence of any demand visibility in near future.

Indian end users bids were considerably low to support any deals to take place.

Outlook

India's met coke market remains bearish in the near term due to weak demand from steel mills, amid falling steel prices and Chinese coke prices. With ongoing pressure from imports and fallen demand from downstream industries, further potential declines in met coke prices are anticipated, especially on the west coast. Additionally, a fourth round of price cuts in China, along with sluggish global demand, could exacerbate downward trends in both coke and coking coal markets.