Asian Coke Prices Decline as Scrap Usage Rises; May Demand Recovery Expected

Coke 

Steelmakers Favor Scrap Over Pig Iron, Forcing Coke Sellers to Cut Prices Across China and India

Asian metallurgical coke prices weakened in early May as steelmakers reduced pig iron use, turning instead to cheaper scrap, which lessens the need for coke in blast furnaces.

According to Kallanish, Grade I coke at Zhizhao port in China dropped $3/mt to $183/mt EXW between April 25 and May 2, reverting to mid-April levels. A similar trend was observed in India, where premium coke prices fell by $5/mt to $399/mt EXW, tracking a concurrent $14/mt decline in pig iron prices.

Coke Inventories Rise Amid Weaker Demand

The shift to scrap reduced coke consumption, prompting coke plants to accumulate inventory and cut prices to stimulate sales.

"Steel mills reduced coke purchases as scrap became more economical," the report noted, adding that pig iron use dropped in both China and India.

Chinese Steel Outlook May Reverse Trend

However, outlooks for May suggest a possible demand recovery. According to a China Steel Logistics Committee (CSLC) survey, the new orders index for April jumped 9.9% month-on-month to 51%, indicating improving demand for finished steel.

Additionally, the finished steel inventory index dropped 14.9% to 35.7%, suggesting better sales and the likelihood of higher steel output in May, which would lift demand for coke and other raw materials.

India Follows Similar Path

In India, the combination of lower pig iron prices and a greater shift to scrap led steel mills to reduce coke intake, mirroring the trend seen in China. Indian coke prices, already higher than China’s, dropped amid pressure from falling raw material costs and subdued demand.

China Steel Production Hits 10-Month High

Despite short-term coke price pressures, Chinese steel production hit 92.84 million tons in March, up 4.6% year-on-year, the highest in 10 months. Q1 2025 output reached 259.33 million tons, up 0.6% year-on-year, according to the General Bureau of Statistics of China.

As utilization rises in May, analysts expect coke demand to rebound, potentially supporting a price floor in the near term.