India: Met coke production rises 5% in Oct'22 as merchant output surges

India's met coke production stood at 3.92 mnt in October 2022, up 5% m-o-m. Out of this merchant met coke output more than doubled to 0.63 mnt whereas captive production went down by 5% to 3.29 mnt in October.

The rise in merchant coke production can be attributed to a few captive coke ovens being under maintenance and Tata’s NINL plant purchasing significant volumes of about 45,000 t of coke from the merchant market.

Also, amid availability of cheaper Chinese met coke, Indian steel mills preferred importing rather than converting coking coal into coke. CoalMint data shows that India's met coke imports rose by 180% m-o-m in October to 0.51 mnt, with the highest quantity being booked by JSW Steel.

China's met coke is being offered at quite competitive rates in the Indian market since the past two months as the domestic steel demand in Beijing has been quite sluggish amid Covid restrictions. Blast furnace capacity utilisation rates in China fell by 2% m-o-m in October to 87%, which is around 90-92% under normal conditions.

In the first six months of 2022 (January-June), India's met coke production was on an increasing trend and touched the peak of 4.13 mnt in June, before declining in July due to many steel plants announcing maintenance shutdowns following the steel export duty imposition.

India's crude steel output increases in Oct'22

India's crude steel production stood at 10.24 mnt in October, up 4% from 9.87 mnt in September, whereas on y-o-y basis, production remained more or less constant.

During the July-September period, the major Indian steel mills completed their maintenance schedules resulting in improved crude steel output in October.

India's crude steel output rose 6% y-o-y to 103.37 mnt in January-October against 97.18 mnt in the same period of 2021.

Met coke price trends

Domestic met coke prices peaked in March (owing to the Russia-Ukraine crisis, which caused coking coal prices to reach all-time highs), before correcting in June and July. The price for 64% CSR 25-90mm BF grade met coke in October stood at an average of INR 43,000/t, which recently inched down to INR 40,500-41,500/t in both the eastern and western regions of the country.

Chinese met coke (64% CSR) prices averaged at $430/t in October, down $20/t m-o-m, and have inched down further to $400/t CFR India recently.

Outlook

India's total met coke production is likely to be impacted in November amid cheaper availability of Chinese met coke. With domestic met coke producers fulfilling NINL's requirement, production may remain at a similar range as that of October but captive producers may witness a drop in output, CoalMint understands.