India: Met coke prices hit by falling import offers, steel price cuts

• Met coke import offers to India under pressure
  
  
• China to announce seventh round of coke price cut
  
  

Indian domestic met coke prices fell this week owing to reduced buying interest. Domestic met coke prices fell by INR 600/t w-o-w to INR 34,200/t, exw-Jajpur. Also, in western India prices fell by INR 1,400/t w-o-w to about INR 31,300/t exw Gandhidham.

A few cokeries were learnt to have reduced production while a few took shutdown to reduce losses. Also, some have started selling imported material in the domestic market.

Deals concluded:

• Eastern India based producer sold about 25,000 met coke at INR 34,000-35,000/t exw-Jajpur.
  
  
• West side cookery sold about 5000t met coke at INR 30,000-31,000/t exw-Gandhidham levels.
  
  

Factors weighing on met coke offers:

Imported met coke offers under pressure - Imported met coke offers to India are currently at around $250/t FOB Indonesia and at $240/t FOB China. Offers have remained range-bound w-o-w. Met coke stocks at ports have risen putting pressure on prices, and end-users are focusing on procuring material on a stock and sale basis, sources informed BigMint. However, clarity on imposition of import quota restrictions is awaited.

Chinese coke prices drop - Some mills in Hebei and Tianjin were reported to be attempting a seventh round of price cuts by RMB 50-55/t. However, opinions are divided on whether this will be accepted, given that some cokeries had attempted to raise prices the day before, indicating their resistance to further cuts.

The continuous decline in steel prices has severely impacted the profitability of nearly all steelmakers. As a result, most domestic steel mills are expected to further reduce coke deliveries from their suppliers and show little interest in booking new cargoes, as they grapple with growing losses from selling finished steel.

Coking coal prices fall - Australian premium hard coking coal (PHCC) prices dropped by $4.5/t w-o-w to $196/t FOB w-o-w. There has been an uptick in inquiries from the Indian market, and some Chinese buyers are also closely monitoring the market for potential opportunistic purchases. Sellers are becoming cautiously optimistic as the market shows signs of stabilizing after continuous declines. However, they are waiting to see if this positive sentiment will hold.

The Chinese market presented a mixed outlook, with domestic coking coal prices showing a slight increase in recent auctions, while some Chinese mills initiated the seventh round of met coke price cuts. A Chinese trader observed that the market appears to be at a turning point with mixed signals. Nonetheless, the recent strengthening of the domestic futures market has opened a window for traders to take positions in seaborne coal cargoes.

Outlook

Domestic met coke prices may fall by around INR 1,000/t in the next 10 days, as per sources. India's met coke prices are currently facing downward pressure due to a combination of reduced domestic buying interest and more competitive import offers.

Chinese met coke prices are under pressure as mills in Hebei and Tianjin attempt another round of price cut. The continuous drop in steel prices may pull prices downward.