Coke exports increased by more than 250% in August

India's coke export growth recorded a staggering 5.241% year-on-year growth compared to 4,133t in August'20.

Indian coking coal prices from Australia remained stable at $300-330/ton compared to China's all-time high of $560-570/tonne domestic coking coal prices.

Market sources told CoalMint, meeting with coke exporters in India, that it has a good working margin with coal import prices at $300-330/ton and coke export prices at $540/ton on FOB basis. Compared to local coke prices of INR 34,000-35,000/ton, export realizations are at INR +40,000/tonne.

Indian sellers are therefore more interested in exports than domestic sales at lower prices. Local steel grade pig iron prices are around INR 38,000-39,000/tonne, while local mills are experiencing narrowing margins.

Countries that previously imported coke from China are changing their purchasing habits and purchasing from India, which gives India an advantage in the coke export market. Export volumes of over 200,000 tons were confirmed to several countries in the EU, while South East Asian buyers purchased around 230,000 tons from India. Trafigura and Bengal Energy are leading exporters, according to CoalMint reports.

Coke production decreased, imports increased

China's unofficial ban on coal imports from Australia since mid-October 20 has resulted in a paradigm shift in Asian coal market dynamics, ultimately leading to exponential growth in global coke prices.

Acute coking coal shortages in China and rising domestic import prices have forced coke producers to cut production, resulting in higher coke imports from the country's steelmakers.

In addition, the closure of many coke plants in northern China for environmental reasons has affected the country's coke production.

Considering that the country once exported 10-15 million tons (mn tons) of coke annually, this inevitably kept China, the world's leading exporter of metal coke, out of export. In fact, it became a net importer in July'20 for the first time in 20 years.

Coke prices will rise further

Globally, coke prices are expected to rise further due to higher coking coal prices and the Sino-Australian trade dispute, which complicates the supply situation in China and increases domestic coal and coke prices.

Global coke prices are climbing as high as $600/tonne - the highest level since 2008 when prices reached $780/tonne CFR India.