February 23, 2012: After remaining subdued during the last quarter (October-December) of 2011 on account of low demand from Indian steel makers, metallurgical coke prices are likely to firm up slightly from next month, an official of a merchant coke maker said on February 22.

Coke prices were quoted at around Rs 20,000/ton in the last quarter of 2011 and some deals were struck even at about Rs 18,000/ton as demand from steel makers had come down while some coke makers were facing liquidity crunch, the official said.

"Some steel makers were forced to suspend their production due to non-availability of iron ore, while others were operating at much below their rated capacity. Thus there was very limited demand for coke leading to build-up of inventories as a result of which prices turned weak during the quarter," he said.

"Things are looking up from beginning of February 2012 as iron ore supplies have eased a bit and that has led to increased steel production. Because of the overall better situation in steel industry, there has been slightly better demand for coke and inventories have fallen," he added.
The official feels that there is no further scope for fall in coke price even as coking coal prices are down sharply to contracted level of $235 a ton fob for January-March, while spot price is further down to around $210 a ton.

"The current price is anywhere between Rs 20,000 to Rs 20,500/ton, but things are looking better for coke makers and it should firm up in the coming days," the official said.

Source: ISMW