Given mounting concerns about the availability of merchant coking coal in the global market and the consequent bullishness of Australian suppliers, India-based producers of metallurgical coke have decided to increase their offers. On balance, by the second week of the year offers for metallurgical coke 80-100 mm of BF grade in the Indian market have increased by INR 3,000-5,000/mt ($41-68/mt) compared to the previous levels, rising to INR 45,000/mt ($609/mt) ex-works. “The current market is highly volatile here,” the main India-based coke producer stated. According to a few sources, in the west coast of India the sellers are said to be still ready to sell material at INR 38,000-39,000/mt ($514-528/mt) levels.
Having seen a certain rise in buying interest for ex-India basic pig iron (BPI) in the global market and consequent demand for met coke in the domestic market, a major India coke producer, Vedanta’s Sesa Coke, has stepped up efforts to ramp up its production. “We are in the process of expansion. However, details are not very sure yet. The plan is to reach 0.5-0.6 million mt per year at the Gujarat plant, but currently we are struggling with refurbishing the plant,” an official at the company stated.
In the export market, in its turn, a cargo for 30,000 mt of ex-India met coke is said to have been traded at $507/mt FOB. As the trader is said to have taken material as a position, the destination has not been specified for the time being. Some traders have started testing the market with offers at $540/mt FOB levels, but are “getting no buying interest from customers at these levels yet.”
While by this week the seaborne ex-Australia coking coal price has increased to $380/mt FOB, it still has room to reach to $400/mt FOB, some sources assume. “The continuous rise of prices in China contributes to the further uptrend in the global market as well,” a European trader commented with regard to the current situation.
Specifically, by January 12, the price for hard coking coal in the most-traded contract on China’s Dalian Commodity Exchange (DCE) surged by 3.2 percent compared to January 7, to RMB 2,350.5/mt ($369/mt). Meanwhile, coke futures prices rose to RMB 3,181/mt ($500/mt), up 0.6 percent within the same period of time. In the export market, ex-China met coke offers at $500/mt FOB are becoming rarer.