SynopsisSeveral Chinese-backed firms at the Indonesia Morowali Industrial Park are gradually commencing coke production, following delays influenced by market conditions. Rising Indonesian coke output is expected as De Tian Coking, Risun Wei Shan New Energy, and Dexin Steel initiate operations, aiming to contribute to the IMIP's targeted metallurgical coke capacity of around 18.8 million tons. Despite challenges posed by volatile coke prices and market conditions, Indonesian coke exports have surged, primarily driven by demand from India.ArticleThe metallurgical coke sector in Indonesia is witnessing a revival in production as Chinese-backed firms in the Indonesia Morowali Industrial Park gradually launch operations. Delays that were initially attributed to market conditions are now being overcome, and several key players are gearing up to contribute to the IMIP's ambitious metallurgical coke production targets.De Tian Coking: This firm set the wheels in motion with the initiation of coke production on August 28. Their projected output for 2023 is anticipated to reach just under 1.3 million tons.Risun Wei Shan New Energy: On July 27, the second coke oven at this facility was ignited, with production slated to commence by the end of October. This followed closely on the heels of the first coke oven, with an annual capacity of 800,000 metric tons, which began production on July 19. Plans are in place for the gradual launch of the third and fourth coke ovens, each with a similar capacity, by year-end. This is expected to contribute to a total output of approximately 500,000 to 600,000 metric tons in 2023.Dexin Steel: Anticipates reaching 2.05 million metric tons of coke output this year following the second-phase capacity ramp-up. Impressively, over 70% of the total coking capacity has already been launched.While these developments are promising, it's essential to acknowledge that the rollout pace has been slower than initially planned for the IMIP projects, which collectively aim for approximately 18.8 million metric tons of metallurgical coke capacity. Market conditions, especially coke prices, have influenced these delays, as the market participants noted.Indonesian coke prices typically follow the trends of Chinese coke prices. Chinese coke export prices experienced a significant drop in June, reaching a three-year low, largely due to weak downstream demand. The Argus 65 CSR met coke index fell by nearly 40% from mid-March to late June. However, prices have since rebounded, rising by 17% by the end of August.Indonesia has seen a substantial year-on-year increase in coke exports during January-June, with India emerging as the leading importer, accounting for 59% of Indonesia's coke imports in the first half of the year. Competitive prices and consistent coking quality have continued to drive demand for Indonesian coke from various countries.Furthermore, tight availability of Australian hard coking coal has contributed to maintaining elevated coke prices, making importing coke an economically attractive option for some buyers to reduce costs compared to coking coal. Indonesian coke plants currently import an estimated 20-50% of hard coking coal on a term contract basis, a trend that is expected to continue in the short term as IMIP coke production gradually increases.However, the long-term dynamics of Indonesian hard coking coal spot trades may change, depending on the volume of term contracts initiated by IMIP coke plants to ensure supply stability and mitigate potential price fluctuations.ConclusionIndonesia's metallurgical coke production is on the path to recovery, with several IMIP-based firms overcoming delays and commencing operations. Despite market challenges, including volatile coke prices, Indonesian coke exports have surged, primarily driven by demand from India. As the industry navigates evolving market conditions, the ability to adapt and ensure supply stability will be essential for long-term success.
SynopsisSeveral Chinese-backed firms at the Indonesia Morowali Industrial Park are gradually commencing coke production, following delays influenced by market conditions. Rising Indonesian coke output is expected as De Tian Coking, Risun Wei Shan New Energy, and Dexin Steel initiate operations, aiming to contribute to the IMIP's targeted metallurgical coke capacity of around 18.8 million tons. Despite challenges posed by volatile coke prices and market conditions, Indonesian coke exports have surged, primarily driven by demand from India.ArticleThe metallurgical coke sector in Indonesia is witnessing a revival in production as Chinese-backed firms in the Indonesia Morowali Industrial Park gradually launch operations. Delays that were initially attributed to market conditions are now being overcome, and several key players are gearing up to contribute to the IMIP's ambitious metallurgical coke production targets.De Tian Coking: This firm set the wheels in motion with the initiation of coke production on August 28. Their projected output for 2023 is anticipated to reach just under 1.3 million tons.Risun Wei Shan New Energy: On July 27, the second coke oven at this facility was ignited, with production slated to commence by the end of October. This followed closely on the heels of the first coke oven, with an annual capacity of 800,000 metric tons, which began production on July 19. Plans are in place for the gradual launch of the third and fourth coke ovens, each with a similar capacity, by year-end. This is expected to contribute to a total output of approximately 500,000 to 600,000 metric tons in 2023.Dexin Steel: Anticipates reaching 2.05 million metric tons of coke output this year following the second-phase capacity ramp-up. Impressively, over 70% of the total coking capacity has already been launched.While these developments are promising, it's essential to acknowledge that the rollout pace has been slower than initially planned for the IMIP projects, which collectively aim for approximately 18.8 million metric tons of metallurgical coke capacity. Market conditions, especially coke prices, have influenced these delays, as the market participants noted.Indonesian coke prices typically follow the trends of Chinese coke prices. Chinese coke export prices experienced a significant drop in June, reaching a three-year low, largely due to weak downstream demand. The Argus 65 CSR met coke index fell by nearly 40% from mid-March to late June. However, prices have since rebounded, rising by 17% by the end of August.Indonesia has seen a substantial year-on-year increase in coke exports during January-June, with India emerging as the leading importer, accounting for 59% of Indonesia's coke imports in the first half of the year. Competitive prices and consistent coking quality have continued to drive demand for Indonesian coke from various countries.Furthermore, tight availability of Australian hard coking coal has contributed to maintaining elevated coke prices, making importing coke an economically attractive option for some buyers to reduce costs compared to coking coal. Indonesian coke plants currently import an estimated 20-50% of hard coking coal on a term contract basis, a trend that is expected to continue in the short term as IMIP coke production gradually increases.However, the long-term dynamics of Indonesian hard coking coal spot trades may change, depending on the volume of term contracts initiated by IMIP coke plants to ensure supply stability and mitigate potential price fluctuations.ConclusionIndonesia's metallurgical coke production is on the path to recovery, with several IMIP-based firms overcoming delays and commencing operations. Despite market challenges, including volatile coke prices, Indonesian coke exports have surged, primarily driven by demand from India. As the industry navigates evolving market conditions, the ability to adapt and ensure supply stability will be essential for long-term success.
