Indian met coke prices remain stable this week
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Few merchant cokeries experiencing reduced production levels
Indian met coke prices have been recorded at INR 34,000/tonne (t) ex-Jajpur this week. Prices dropped by INR 500/t m-o-m compared to INR 34,500/t ex- Jajpur in January 2024.
Prices remained unchanged w-o-w amid subdued trading activities in the market. Certain merchant coke oven plants are operating below capacity and opting to blend imported met coke due to reduced imported offers. Elevated coking coal levels persist for cokeries, leading to reduced purchases. Low demand is observed for both coking coal and pulverized coal injection grades.
Coking coal offers
Australian premium hard coking coal prices remained largely stable w-o-w, assessed at $314/t on 29 February 2024 amid weak activity, while offers remained standing. Concerns persisted among end-users regarding the sustainability of prevailing price levels, this can be attributed to sluggish demand from India and a declining Chinese market.
Amidst this backdrop, trading activity remained thin in the Asian market, with some sellers refraining from actively offering their cargoes due to uncertainty surrounding a major Australian miner's coal supply pipeline for the April-loading window. This hesitation in offering cargoes resulted from a lack of visibility regarding the miner's prime coal availability.
Imported coke prices
Chinese met coke prices were assessed at $354/t CNF India, for 65% CSR, CFR India. China's met coke producers have accepted the fourth round of price cut on 27 February 2024 prompted by steel mills in Hebei and Shandong provinces facing depressed margins. Met coke prices in Hebei's Tangshan were assessed at RMB 2,060/t ($332/t), a fall of RMB 100/t ($14/t) d-o-d. Squeezed profits and sluggish demand led to suppressed production and weak market outlook.
Margins for mills remained negative, with merchant cokeries facing further deterioration post the fourth met coke price cut, notably for those using high-cost top-charging coke ovens. This led to reduced coking coal demand in the near term. Despite slight coking coal price declines, they could not offset coke production costs, causing operational hurdles and some suspensions.
Despite certain supply curbs, coke-makers still saw inventory accumulate due to logistical constraints during the holiday breaks. Additionally, recent snowfall in major production areas disrupted transportation, adding inventory pressure for coking plants. Coke demand remained sluggish as steelmakers had no urgent need for replenishment, while facing sales pressure with high finished steel stocks because of low demand from end-users, such as the property sector.
Nevertheless, Indonesian sellers' offers reportedly held steady despite the fourth round of coke price cuts and decreased offers from Indonesian traders.
Pig iron market
Indian pig iron prices dropped by INR 200/t w-o-w and were assessed at INR 38,300/t DAP Durgapur on 22 February 2024. Moreover, prices dropped by INR 500/t w-o-w in the Raipur market and are currently assessed at INR 36,300/t DAP- Raipur.
Outlook
Domestic met coke prices are anticipated to decline due to continuous availability of competitive offers and decreased purchasing activities. Moreover, declining imported prices are enticing end-users towards imports, potentially causing domestic coke prices to trend downwards in the near term.
