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Imported met coke rates turn soft on weak demand, higher availability

March 21: The offered prices of imported metallurgical coke have turned extremely soft on poor demand from steel-makers and excess availability, prompted by increased arrivals from China.

"There is practically no demand from steel-makers and increased arrivals from China have created a kind of situation wherein buyers are looking to purchase the material at extremely low prices," a leading trader of imported met coke based out of Kolkata told ICMW on March 21.

"I am ready to offer a full vessel of 40,000 tons of imported coke for unloading at Paradip at $220 per ton CFR. If somebody is willing to pay cash, I can offer the cargo even at $215 per ton," the trader, who is also into manufacturing of met coke, said.

"The problem right now is that no one is willing to buy met coke in anticipation of further fall in prices," he said.

The price of imported met coke, which was quoted at $260 per ton CFR India at the beginning of February fell to around $235 per ton two days back, according to a compilation by ICMW.

Asked about his offering for unloading at Haldia port, the trader said, "Because of higher freight rates due to restriction of vessel size due to draft-related issues at Haldia port, the offering for Haldia for full vessel of 15,000-20,000 tons, may be as low as $225 per ton."

Industry experts said there are multiple reasons for steep decline in imported met coke prices.

"One is the panic like situation in the wake of weak economic data from China that has suddenly increased the availability of material from China as they are looking to sell as much material as possible," said one expert.

There are rumours of default by a few Chinese traders leading to diversion of cargo, he said.

"Another reason is steep fall in spot coking coal prices in the Australian market, prompting steel-makers to procure more coking coal for conversion to met coke, which, in turn, has curtailed the demand for domestic or imported met coke," he said.

Echoing the sentiment, another expert pointed out that the situation has turned worse because of low steel demand in India that is discouraging steel-makers to buy met coke in bulk as they are not sure which way the steel market would move in the coming months.

"The main problem is that there is no offtake in the market," he added.

A trading source claimed that steel-makers like Bhushan Steel and Monnet Ispat are passing through a severe financial crunch and are not in a position to even open direct Letters of Credit (LCs).

Some steel-makers are even willing to pay interest to traders if the latter could open LCs on their behalf, he claimed.

"I do not think there will be any improvement in the overall met coke market situation in the coming days and I will not be surprised if the offer prices fall to $200 per ton CFR," said another trading source.