India: Steel inventory, high imports weigh on BigMint's coking coal index

BigMint's newly launched coking coal index for premium hard coking coal (PHCC) was assessed at $211/t CNF Paradip, India, as on 31 August 2024. Indian steel mills remained less active in booking spot coking coal cargoes in the beginning of the month. Increasing steel inventory, falling steel exports and arrival of previously booked imported cargoes have kept Indian prices under pressure in August.

Notably, India's monthly coking coal import volumes are likely to have risen to 5.7 mnt in August against 4.97 mnt in July upon arrival of previously booked cargoes, as per provisional data with BigMint.

Rationale:

• BigMint's coking coal index has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
  
  
• Three (3) deals have been reported so far in this publishing window, and two (2) have been considered for price calculation and accorded 50% weightage for T1 trade. Deals of 180,000t were collected in the publishing window out of which 105,000t were considered for index computation in the range of $205-211/t CFR India
  
  
• Five (5) firm offers, bids, and indicative prices were heard. Four (4) were taken for price calculation and given the balance 50% weightage.
  
  

Factors impacting global coking coal prices

• Coking coal prices have witnessed a downward trajectory in August. Average Australian PHCC prices fell significantly by $30/t m-o-m to $208/tonne (t) FOB Australia in August from $238/t in July.
  
  
• Bid-offer disparities and falling steel prices globally have weighed on coking coal prices in all major countries. Additionally, coke price cuts in China and ongoing monsoon season in India have weighed on inquiries.
  
  
• Citing prolonged losses from selling finished steel, on 28 August some steelmakers in North China's Hebei province and East China's Shandong province initiated a new round of coke procurement price cut by another RMB 50-55/t ($7-7.3/t) effective from 29 August, according to market sources.
  
  

Near-term outlook

Amidst falling steel prices and ongoing monsoon season fresh inquiries for spot coking coal cargoes will be fewer, highlighted sources. However, a slight improvement in inquiries is being seen towards the month end and buyers in western and southern India have been heard to have floated fresh inquiries.