Over the past week the Chinese metallurgical coke market has continued its declining trend. Demand for coke has decreased because of the sufficient stocks held by domestic steel mills, while purchase prices have been lowered due to cost pressure.
Product name | Specification | Place of origin | Average price (RMB/mt) | Weekly change (RMB/mt) | Average price ($/mt) | Weekly change ($/mt) |
Coke | 2nd grade | Shanxi | 1,680 | -20 | 246 | -3 |
Shanghai | 1,900 | - | 279 | - |
During the past week the Chinese coke market has been characterized by a declining trend. At present, the mainstream quotations of second grade metallurgical coke from large producers in Shanxi Province are at RMB 1,650-1,700/mt ($242-249/mt) with quotations for first grade metallurgical coke at RMB 1,800/mt ($264/mt), both down by RMB 20/mt ($3/mt) week on week. Meanwhile, the purchase prices of Hebei Province-based mills are at RMB 1,750-1,850/mt ($257-271/mt) for second grade metallurgical coke. The mainstream prices in the eastern China coke market are at RMB 1,900-1,950/mt ($279-286/mt). In addition, the mainstream prices of coking coal in the overall domestic market are in the range of RMB 1,350-1,400/mt ($198-205/mt).
In China, prices of steel products in the domestic market observed some increases due to rising costs after the Spring Festival holiday, while end-user demand in the steel product market has been weak. Currently, most steel mills are not active in purchasing coke, and some mills have lowered their purchase prices due to shortage of funds and also because they can still carry out normal production operations using their current coke stocks. It is thought that coke purchases will remain at low levels until the steel market activity fully recovers.
At present, domestic market prices of coking coal have remained at high levels. Xishan Coal and Electricity Power, a Chinese coal producer, has lowered its coal price for the power supply sector by RMB 30/mt, while other prices of coking coal are unchanged from last month. In addition, overall coal mines are not operating at high output rates, and so coking coal supplies have been slightly on the short side. Some coking plants have been obliged to buy coking coal at high prices in order to ease their stock situation and maintain normal production. With coking coal remaining stable at high price levels, current production costs of coke are also high. Elevated coking coal costs will continue to constitute the main source of support for domestic coke prices in China in the coming period.