Coal news and updates

Coke prices firm up despite softness in coking coal rates

January 6: Spot prices of metallurgical (met) coke increased by nearly $27 per ton even as coking coal prices fell by around $2.75 per between July 20, 2013 and January 1, 2014, an analysis of price trends by ICMW revealed.

The price of met coke was quoted at $245 per ton FOB Australia on July 20 when coking coal was quoted at about $133.75 per ton. However, coking coal prices were quoted at about $131 per ton and met coke at $272 per ton as on January 1, 2014, the data revealed.

The trend revealed that despite slight softness in coking coal prices, met coke prices firmed up significantly.

This means the softness or fall in coking coal prices had no impact on met coke prices.

Further, prices of met coke, which were quoted at $265 per ton on September 12, when coking coal was quoted at $153 per ton, have risen by $10 per ton to $275 per ton when coking coal prices were down by $22 per ton at $143.

"This indicates that, to some extent, there is no co-relation in the movement of prices of coking coal and met coke," an official with a western India-based coke maker said.

However, the Managing Director of South India (Hosur)-based coke maker Bhatia Coke and Energy Pvt Ltd, Aman Bhatia, said, "I have not seen any changes in the prices of coking coal. There has been no impact on domestic coke prices due to the fall in coking coal prices."

Bhatia, however, indicated that because of the rise in coke prices between July 20 and January 1, 2014, demand from Indian steel makers has gone down.

"I believe, once the actual prices (of domestic met coke), start falling, only then steel- makers will show some interest.  Between June-October, 2013, demand for coke had fallen by 50-60% as steel plants were not buying. As demand was not there, coke makers, those players left operating, had raised prices," he said.

Bhatia said, there had been signs of increase in steel demand from November leading to higher production and consequent to that coke prices too firmed up a bit.

Asked about the prospect of imports of met coke, Bhatia said, "So far as imports are concerned, these will depend on prices."

He pointed out that domestic met coke makers had incurred losses from February to August this year as they were compelled to sell their material at low prices because of a steep fall in prices of imported coke.

It is generally said that Indian steel players prefer buying domestic coke because in doing so they get some credit from suppliers or manufacturers whereas if they buy imported material, they have to pay in advance.

"Despite that, they had been a surge in usage of imported coke because prices had fallen drastically," sources said.

The following chart/table gives details of price movement (in $/tn) of coking coal and met coke between January 1, 2013 and January 2, 2014.