Met coke prices revive on high demand

Spot prices of met coke have shown some signs of recovery over the past six months. However, the prices are still considerably lower on a y-o-y basis.

The improvement in prices over the last few months is expected to help key suppliers like Gujarat NRE Coke.

Analysts at foreign brokerage houses point out that recent spot deals for met coke on a free-on-board basis are in the range of $155 to $160 a tonne as compared to $120-$125 a tonne six months ago.

The prices were at $240-$250 a tonne in the middle of CY05. Lower prices had resulted in Gujarat NRE Coke's operating profit falling by 82.95 per cent y-o-y to Rs 8.91 crore in the first quarter ended June 2006.

The prices of met coke have improved during the last few months despite the falling prices of the key input, coking coal. Coking coal prices are currently pegged at $110 to $115 a tonne as compared to $125 a tonne last year.

Analysts note that a dip in met coke prices a few months ago had led to several smaller players in the unorganised sector curtailing their operations.

In addition, the rising demand from user industries, like cast iron, brass foundries and blast furnaces of steel plants from both domestic and foreign markets, has led to revival in met coke prices over the last few months.

Meanwhile, Gujarat NRE Coke, in a bid to ensure regular supplies of inputs like coal, had earlier acquired stakes with overseas suppliers. For instance, it had earlier acquired a 5 per cent stake in Australian coal producer Resource Pacific Holdings Ltd for A$8.1 million (approximately Rs 27 crore).