India's met coke prices stable, set to rise on uptrend in coking coal market

Indian met coke prices have been recorded at INR 32,500/tonne (t) ex-Jajpur, unchanged this week. Prices remained stable w-o-w. However, the met coke market is facing an upward pressure on rise in coking coal prices and some shortage of material in the market.

Indian met coke imports have been recorded at 0.22 mnt in March as against 0.33 mnt in February, as per data maintained with BigMint.

Coking coal prices

Australian premium hard coking coal prices rose by 14% w-o-w to $253.5/t. The involvement of end-users indicated sustained demand amidst these circumstances. Few trades bolstered recent sentiment upswings, yet with the expected return to normal supply flow, price escalation was anticipated to be limited.

Indian buyers who had deferred their procurement decisions are anticipated to return to the market, spurred by the stabilisation of prices after a period of decline.

The domestic steel demand has remained subdued due to regulations related to elections, which restrict the government from initiating any new infrastructure and construction projects until after the electoral process concludes. The situation has led to a slowdown, as significant projects are put on hold until the election results are announced.

However, there is optimism for an uptick in coking coal demand post-election, particularly following the announcement of a comprehensive union budget in July. This could provide a much-needed boost to the market.

Capacity ramp-ups at National Mineral Development Corporation (NMDC's) 3 mnt/year Nagarnar steel plant in Chhattisgarh and JSW Steel's 5 mnt/year hot strip mill at Vijayanagar in Karnataka are further expected to increase coking coal demand from the country in Q2.

Imported coke prices

Chinese met coke prices were assessed at $325/t CNF India, for 65% CSR coke. China's met coke producers have accepted the first round of price hike on 18 April, 2024. Met coke prices in Hebei's Tangshan were assessed at RMB 1,760/t ($243/t), an increase of RMB 100/t ($14/t) d-o-d. The anticipation of a second round of Chinese coke price hikes has already been factored in by market participants.

Indian end-users have been opting for more cost-effective options like metallurgical coke rather than coking coal. This shift came as a response to successive price reductions in China's coke market, which have put downward pressure on international prices.

In anticipation of the monsoon beginning in June, Indian mills typically ramp up their restocking activities. However, this year, the boost in demand from restocking is expected to be subdued due to the general elections in the country.

Most Chinese cokeries have already sold out their ex-washplant goods to traders. While production levels have been gradually rising, they have not yet reached full capacity.

Pig iron market

Indian pig iron prices rose by INR 2,300/t w-o-w and were assessed at INR 42,000/t DAP Durgapur on 18 April 2024. Similarly, prices rose by INR 1500/t w-o-w in the Raipur market and are currently assessed at INR 40,850/t DAP- Raipur.

Outlook

The met coke prices is anticipated to see a rise owing to some shortage of the material along with rise in coking coal prices. However, the elections could temporarily dampen the demand.