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India: Met coke exports up over 250% in Aug'21 on sustained global rally

Metallurgical (met) coke exports from India have witnessed a sharp rise of 263% to 199,500 tonnes (t) in Aug’21 compared to 55,000 t in Jul. More importantly, India...

Met Coke
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15 Sep 2021, 13:30 IST
India: Met coke exports up over 250% in Aug'21 on sustained global rally

Metallurgical (met) coke exports from India have witnessed a sharp rise of 263% to 199,500 tonnes (t) in Aug'21 compared to 55,000 t in Jul.

More importantly, India's met coke exports growth was recorded at an astounding 5,241%, year-on-year, as against 4,133 t in Aug'20.

 

India sellers turn active on exports market

India's coking coal import prices from Australia have stayed stable at $300-330/t in comparison with China's domestic coking coal prices that are at $560-570/t, an all-time high.

Market sources informed CoalMint that met coke exporters in India have a decent working margin with coal import prices at $300-330/t and met coke export prices at $540/t on FOB basis. Compared to domestic met coke prices of INR 34,000-35,000/t, export realisations are at INR +40,000/t levels.

Indian sellers, therefore, are interested in exports rather than domestic sales at lower prices. With domestic steel grade pig iron prices around INR 38,000-39,000/t, domestic producers are experiencing shrinking margins.

Countries which previously imported coke from China are shifting purchase patterns and buying from India, giving India an edge in the met coke exports market. Export volumes of over 200,000 t have been confirmed to a few countries in the EU, while South East Asian buyers have bought around 230,000 t from India. Trafigura and Bengal Energy are the leading exporters, as per CoalMint reports.

 

Key factors driving the rally

China's unofficial ban on Australian coal imports since mid-Oct'20 effected a paradigm shift in Asian coal market dynamics that eventually led to exponential growth in global met coke prices.

Acute shortage of coking coal in China and its rising domestic and import prices forced Chinese met coke producers to curtail production, which translated into higher met coke imports by the country's steel mills.

In addition, the closure of many cokeries due to environmental reasons in North China affected the country's met coke production.

This inevitably kept China - the world's leading met coke exporter - away from exports, considering that at one time the country used to export around 10-15 million tonnes (mn t) of met coke per year. In fact, it turned a net importer for the first time in 20 years in Jul'20.

 

Outlook

Globally, met coke prices are expected to increase further due to higher coking coal prices and the China-Australia trade spat that has complicated the supply situation in China and boosted domestic coal and coke prices.

Global met coke prices are inching up to around $600/t - the highest since 2008 when prices touched around $780/t CFR India.

The global met coke rally is likely to prompt Indian coke suppliers to focus more on exports in the coming months, CoalMint notes.

 

15 Sep 2021, 13:30 IST

 

 

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