India’s domestic metallurgical coke industry is grappling with the impact of cheaper imports, particularly from Indonesia and China.
India’s met coke imports in 2023 reached a five-year high of 3.83 million tonnes. Indonesia and China together accounted for 34% of the country’s total met coke imports, as per customs data.
While China has traditionally been a significant import supplier of coke for India, Indonesia has recently emerged as a notable exporter of coke into India.
This shift is mainly attributed to heightened investments by Chinese-backed firms in Indonesia’s met coke industry.
Post-pandemic, an ambitious target has been set to establish approximately 18.8m t/year of met coke capacity in Morowali Industrial Park (IMIP), located in central Sulawesi, by the end of 2024. Given Indonesia’s limited steel demand, any surplus met coke produced is typically exported to India.
In 2023, the average price of imported coking coal (Premium HCC) from Australia stood at $312/tonne cfr India. This led to Indian domestic average metallurgical coke prices being 11% higher than imported coke prices.
Currently, domestic met coke (64% CSR) prices in India range from INR 33,500 to 34,000/t ($404-410/t), while imported Chinese met coke (65% CSR) is at around $350/t cfr and Indonesia met coke (62-63% CSR) is priced at around $350/t cfr.
“At current domestic coke prices, Indian mills are showing little interest in buying. We’re currently operating at a loss due to the higher cost of coking coal imported 2-3 months ago. Additionally, converting this coal into met coke remains more expensive than our current selling price of coke,” says one Kolkata-based met coke producer.
In the near term, the combination of sluggish steel demand in India and attractive offers from Indonesia and China is likely to add pressure on domestic met coke prices, possibly widening producers’ losses.