Indian met coke offers rose last week up to INR 45,000/t ($570/t) for blast furnace grade (64% CSR) in the eastern region and suppliers are finding it difficult to find buyers amid competitive imported coke offers from China and Indonesia.
Although there is increased demand in the merchant market of about 80,000-100,000 tonnes (t) at present, buyers are weighing cost advantage against Chinese or Indonesian coke that are being offered in the range of $470-480/t CFR India.
"Indian buyers are bargaining with us citing Chinese coke offers but we are not in a position to lower prices as we are still making coke from the coking coal that we bought at quite high rates. The low-priced coking coal will only arrive at our plants by September-October. Offering coke even at the current levels of INR 44,000-45,000/t is squeezing our margins", said a coke producer based in Kolkata.
On the buyers' side, companies like JSPL, SAIL-Burnpur, Tata Steel, RINL and Tata Metaliks are in the merchant coke market for purchases. As per sources, these buyers are expected to be in the market for the next six-nine months given the fact that their coke oven batteries have been put on maintenance recently.
However, met coke demand from merchant pig iron producers has not gone up significantly. The current pig iron prices are still lower than they were before the export duty on steel was announced. Steel grade pig iron prices are currently assessed at INR 48,200/t exw-Durgapur, which was INR 52,000/t in last week of May.
"If we analyse India's current domestic steel demand, it has not improved significantly as the export duty is still in place. But reputed steel plants are in the merchant met coke market for purchase due to their coke ovens being under maintenance. This has given an advantage to Indian coke producers to raise their offers. With regards to imported material, there are quality and undersizing issues and thus reputed steel players are not making bulk purchases. Subsequently Indian coke producers are offering coke only above INR 40,000/t levels", said a merchant pig iron producer based in Odisha.
Coking coal price continues uptrend
Australian coking coal prices have been rising since the last two weeks surging by $75/t since the beginning of the month. Premium hard coking coal prices are currently assessed at $268/t FOB Australia.
Prices are edging up amid renewed buying interest from South Korea and Japan and also with traders are making purchases in anticipation of demand revival in Europe and India in the coming months. Positive sentiments in the coking coal market have provided support to India's domestic met coke prices, sources informed.
Indian met coke prices are expected to remain rangebound as further rise will be restricted amid cheaper imported Chinese offers, while quality concerns related to imported coke and rising coking coal prices might keep prices supported.
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