Indian imports of metallurgical coke have gathered pace over the past fortnight as buyers seized opportunities of committing fresh bookings on falling prices and decline in domestic production, SteelOrbis learned from trade and industry circles on Wednesday.
Taking into account the figures of the Indian Metallurgical Coke Manufacturers’ Association, sources said that domestic met coke production was on a declining trend. Specifically, in February this year India’s coke production totaled 2.87 million mt, down from 3.76 million mt in the previous month, and mills are forced to increase imports as they are targeting average capacity utilizations levels of above 90 percent in the new fiscal year compared to an average of 80-85 percent over the past few months.
Besides, buying activity was supported by a fall in import met coke prices, mostly in response to the downslide in coking coal prices in Australia.
Trade circles confirmed that, while most of the confirmed transactions were ex-China, some ex-South Africa and ex-Russia deals, were also confirmed by large integrated mills.
Ex-China met coke prices have been heard in the range of $433-440/mt CFR Hazira port in the west, with most of the trade concluded at the lower end of the range, compared to $440-450/mt CFR earlier in the month.
A trade for ex-South Africa met coke has been reported at $444/mt CFR Kandla port in the west, for end-of-April delivery, lower than $450-455/mt CFR a week ago. Meanwhile, another deal for ex-Russia met coke has been reported at the higher level of $450/mt CFR, but sources pointed out that the higher price was still attractive for the buyer as the supply contract had been concluded under the India-Russia rupee trade agreement and involved lower transaction costs and bank charges.
“Indian mills which had deferred bookings last month have returned to the market. Local availability is tight and import prices are becoming attractive against the background of lower coking coal prices. Buyers are rushing to commit trades as they are not certain how long low met coke prices will sustain as we hear that China is planning to cut back output to stabilize prices at higher levels,” an official at the raw materials department (RMD) of a government mill said.
“Indian mills are stocking up to fulfil high production targets for the first quarter of the next fiscal year and most are active in the spot market and are avoiding tender-based purchases to avoid delays and price escalation,” he said.