Polish seaborne met coke exports to slow

Recovering demand in Europe is likely to slow Polish seaborne exports of metallurgical coke in 2021 after exceptionally high volumes shipped in 2020.

A leading Polish met coke exporter is planning to maintain deliveries to China and southeast Asia in 2021, to retain a hold on these new markets. But overall volumes are likely to be scaled back compared with 2020.

Supply tightness and strong demand has driven up Chinese coke prices since last year, with coke producers in China proposing a 15th round of price hikes by 100 yuan/t ($15.51/t). Chinese domestic prices were up to around Yn3,050/t for 62 CSR, and Yn3,150/t for 65 CSR coke this week, equivalent to about $477/t and $492/t on a fob basis, respectively. But this run of price hikes is expected to come to an end as early as late in the second quarter with new met coke capacity in China coming on stream, market participants said.

Polish met coke shipments to Asia reached a record high of 1.63mn t in January to November last year, more than double the volume in 2019, trade data show, as producers took advantage of the premium Asian buyers were willing to pay, alongside a fall in European demand.

But with European demand recovering as steel makers are ramping up production, met coke supplies have tightened. European markets will be the priority for Polish exports this year, a market source said.

In 2020, seaborne exports of met coke from Poland rose to more than 2.8mn t, a 40pc increase on the year, port data compiled by Argus show. The growth was mainly supported by start of exports by Poland's Jastrzebska Spolka Weglowa (JSW) to China as well as other Asian destinations including Vietnam and Malaysia. Other merchant coke manufacturers in Poland that sold seaborne met coke last year include ArcelorMittal, WZK Victoria and Koksownia Czestochowa Nowa.

The Szczecin-Swinoujscie port complex in northwest Poland exported nearly 1.4mn t of met coke in 2020, up by 40pc on the year. The key destinations for these exports include Spain, India and Denmark.

Gdansk port exported 885,000t in 2020, a 73pc increase on the year on the back of strong shipments to Asia. Gdynia port had fairly stable exports on the year of more than 570,000t in 2020. Port sources said that some of its vessels with met coke were destined for partial discharge in Vietnam, with the remaining cargo headed to China.

In 2020, Polish met coke output fell by 13pc on the year to nearly 7.7mn t, government data show.

After particularly weak met coke production in the second and third quarters of 2020, output rose by 4pc on the year to 2.1mn t in the fourth quarter. A leading Polish coke maker has indicated that its plants are running at nearly full capacity because of the continued attractiveness of met coke relative to coking coal.

By Tomasz Stepien