Met coal markets rangebound as buyers hold out, while coke finds fresh support

• Met coal prices stay rangebound
  
  
• Coke prices strengthen on tight supply
  
  

Met coal prices stall as buyers hold back, while coke gets costlier

The metallurgical coal market remained largely rangebound in the week to 17 April, caught in a stalemate as buyers in India and China held out for lower prices while sellers resisted sharp cuts. In contrast, the met coke market saw fresh upward momentum, driven by tight Indonesian supply, a trade into Vietnam, and stable domestic demand in India.

Premium HCC at a standstill

The premium hard coking coal (HCC) market lacked clear direction, with trade activity remaining muted. Sellers held back from making aggressive offers, while buyers, particularly in India, adopted a wait-and-watch mode as domestic steel prices came under pressure. An India-focused trader noted that mills needed clarity on price direction before floating inquiries.

In China, sentiment was steady but cautious. While the domestic coke market showed upward momentum, the upside for coking coal remained limited due to sufficient domestic supply. Forward-delivery seaborne premium coal trading activity stayed quiet, though more offers of low-vol material were seen in China, mostly on an index-linked basis.

A rare spot transaction was heard for Australian BMA 15B semi-hard coal, with a cargo of 80,000 mt traded from an Asian trader at around $150/mt FOB Australia for second-half May loading, indicating some demand for semi-hard grades amid tighter Russian and Indonesian supply.

USEC coal loses competitiveness

The US East Coast low-volatile HCC index softened further, dropping $3/t on the week to $192/t FOB, as Australian coals outcompeted US exports. Market participants noted that the USEC index held little value for Asian buyers, who preferred to benchmark against Australian prices. With Australian low-vol prices at $178/t FOB, the USEC level was not considered competitive. Workable values for USEC LV were heard in a range of $180-$192.50/t, with one buyer viewing anything above $190/t as "very ambitious."

Indian coke holds firm on import parity

Indian domestic blast furnace-grade met coke prices remained stable w-o-w, supported by elevated import parity and steady steel output. BigMint assessed BF-grade coke (25-90 mm) in eastern India at INR 36,400/metric ton ex-Jajpur, while western India prices held at INR 33,500/t ex-Gandhidham. Foundry-grade coke (+90 mm) was also stable at INR 36,400/t ex-Rajkot.

Import parity continued to underpin domestic prices. Indonesian-origin BF coke (65/63 CSR) was assessed at $288/t CFR India, up marginally by $1/t w-o-w, keeping a firm floor under domestic values. While Australian premium hard coking coal prices eased by $5/t to $231/t FOB, providing only limited cost relief, the earlier rally continued to influence production costs. Downstream, steel-grade pig iron prices softened slightly, with bids in a recent NMDC auction declining by INR 200/t, though overall demand from blast furnaces remained steady.

Seaborne coke rallies on tight supply

The seaborne met coke market strengthened significantly. A cargo of 30,000 t of 65/63 CSR Indonesian coke was heard sold at $262/t FOB Indonesia, loading June 5-10, to a Vietnamese trader. This marked a $7/t increase from the previous week. Indonesian suppliers kept offer levels firm amid limited supply, while the Vietnamese steel market remained strong, prompting buying at higher levels.

The wide price gap between Indonesian and Chinese coke, and the limited availability of the former, increased demand for Chinese coke. A 50,000 mt cargo of 65/63 CSR Chinese coke was heard sold into the European market at $245/t FOB China for second-half May loading.

Outlook

The immediate outlook for metallurgical coal remains one of consolidation, with buyers holding significant bargaining power. Indian demand is expected to remain subdued until domestic steel margins recover, while Chinese buyers continue to favour domestic coal over seaborne cargoes. For coke, Indian prices are expected to remain stable with a slight firm bias, supported by import parity and steady blast furnace operations. Any sustained recovery in coal prices will likely depend on a rebound in Chinese steel margins or a sharp reduction in spot cargo availability.