Go to List

India: Domestic met coke prices lose steam amid subdued steel demand

Indian domestic metallurgical (met) coke prices have been correcting from their recent highs amid bearish sentiments due to tepid steel demand despite elevated coking coa...

Met Coke
By
488 Reads
13 Nov 2021, 10:00 IST
India: Domestic met coke prices lose steam amid subdued steel demand

Indian domestic metallurgical (met) coke prices have been correcting from their recent highs amid bearish sentiments due to tepid steel demand despite elevated coking coal prices.

However, in the past month, domestic met coke prices had undergone a sharp hike in line with escalated coking coal prices and a robust export demand.

Currently, offers for the 25-90 mm blast furnace (BF) grade material are assessed at INR 46,000/tonne (t) exy-Cuttack and INR 50,000/t exy-Surat; excluding GST @5%.

 

Domestic met coke prices hurt by bearish demand outlook for flat steel in India

Domestic met coke prices have been impacted by bearish demand outlook for flat steel in India.

Prices in the merchant market are facing downward pressure because pig iron prices are falling fast amid subdued demand for domestic flat steel products, including hot-rolled coils (HRCs).

A month back, HRC prices were trading at higher levels, with decent margins and expectations of good demand. But now, the commodity is on the backfoot, dragged down by nil export bookings in the past one month with prices dropping globally.

That apart, recently held pig iron auctions by SAIL from its various plants witnessed either bids falling sharply or failure to attract any participation at all.Durgapur-based Neo Metaliks has reduced steel grade pig iron offers to INR 43,000/t ex-works (EXW).

 

Indian met coke sellers eye export market

Indian met exporters continue to remain active in the overseas market, owing to higher margins in comparison to domestic sales. Export shipments from India have already reached 18,000 t between 1-5Nov'21, as against nil exports during same time last month, as assessed by CoalMint.

Far-off countries such as Vietnam, Australia, Malaysia and Italy have been actively procuring met coke from India.

 

Australian coking prices decline

Australian coking coal prices, which had witnessed a 141% rise between Jun - Oct'21, saw a marginal correction of 2% over the past week and are currently assessed at around $425/t on CNF India basis for the premium low-volatile (PLV) grade of Australian hard coking coal (HCC).

However, this fall is not sufficient to impact domestic met coke prices because the raw material procurements for the met coke presently being offered were typically done earlier -at a time when coking coal prices were at all-time highs.

Moreover, spot supply of Australian coking coal remains tight as heavy rainfall in Queensland, Australia's major coking coal producing hub, caused potential disruptions on logistics and deliveries.

 

Outlook

The present stability in Indian domestic met coke prices can be assumed to be a temporary phenomenon as steelmakers are largely anticipating a potential demand push post the festive season.

Moreover, with elevated coking coal prices, the country's small-to-mid scale met coke manufacturers might curtail their utilization rates creating supply constraints and providing support to prices thereof.

Furthermore, Australia's approaching wet season in the year-end would be supportive of its coking coal export prices. This would likely prevent downward price movements for Australian coking coal, and in turn, for Indian domestically-produced met coke.

 

13 Nov 2021, 10:00 IST

 

 

You have 1 complimentary insights remaining! Stay informed with SteelMint
;