India: Met coke prices fall in line with imported coke, coking coal prices

Domestic met coke prices in India remained unchanged at INR 41,000-41,500/t ex-Jajpur, on the back of lack of demand from the merchant market and downturn in pig iron and steel prices. Indian demand for coke still remains but with coking coal prices correcting most buyers are bidding at lower prices or waiting for greater clarity before procuring met coke.

Factors affecting met coke prices:

Chinese met coke prices

Chinese met coke prices are at around $416/t CNF Hazira, down $6/t w-o-w. China's metallurgical coke prices experienced downside pressure as some large steelmakers proposed to cut coke prices by another RMB 50-100/t just days after the first round of price cuts. Some major steel firms in Tangshan, in Hebei province, requested lowering of the buy prices of top-charging coke by RMB 100/t and stamp-charging coke by RMB 50/t starting from April 10. Similar price cut requests were also heard in some mills in Shandong province.

Falling Australian coking coal prices

Australian premium hard coking coal (HCC) prices fell by $17/t w-o-w to $275/t FOB, as assessed yesterday. Prices fell by $26/t during the month from the $301/t levels seen towards the beginning of the month. There was thin trading activity from Chinese buyers as domestic coking coal prices in China fell. Australian coking coal prices fell by 13% m-o-m in March 2023 to $301/t FOB. Prices fell because of surplus spot availability of the fuel and weaker buying interest. There has been a downturn in the steel market, on falling appetite amid inventory build-up with Indian buyers and also because the rainy season will approach from May-end. The mills are adopting a wait-and-watch policy to see if price corrections happen in spot cargoes.

Indian steel demand scenario

Demand in the traders' market remained low compared to what it was over mid-December 2022 to mid-February 2023. Demand was majorly driven by restocking requirements during that period. However, end-buyers continued to procure on need basis.

Domestic pig iron prices have come down by INR 1,000/t this week and are currently assessed at INR 42,000/t (steel grade, ex-Durgapur). Domestic pig iron supplies improved with the start of production by major steel pipe producer Welspun and long steel producer Neelachal Ispat Nigam Limited (NINL), after acquisition by Tata Steel. JSW-owned Bhushan Steel and Power Limited (BSPL) had increased pig iron supplies in the domestic market through auctions. It is estimated that production has increased by around 90,000-100,000 t per month. Prices remained under pressure as supplies surged.

On the other hand, SteelMint's benchmark assessment for HRCs (IS2062, Gr E250, 2.5-8mm) stood at around INR 59,500-60,500/t ($725-737/t) exy-Mumbai

Outlook

Indian met coke prices may see a fall in the near term amid lower buying appetite and as selling pressure mounts amongst merchant met coke producers in India.