While generally remaining at their previous levels, prices of metallurgical coke in China have been giving indications of an incipient softness over the past week. The continuous fall in the local finished steel market is having an impact on the domestic coke market, with some market players saying that a minor decline will very likely be seen in coke prices in the coming period.
Product name | Specification | Place of origin | Average price (RMB/mt) | Weekly change (RMB/mt) | Average price ($/mt) | Weekly change ($/mt) |
Coke | 2nd grade | Shanxi | 1,800 | - | 264 | - |
Shanghai | 2,000 | - | 293 | - |
The Chinese coke market has shown a weak stability during the past week. At present, the mainstream quotations of second grade coke from large producers in Shanxi Province are at RMB 1,800-1,850/mt ($264-271/mt), while Hebei Province-based mills have maintained their purchase prices at RMB 1,950-2,000/mt ($286-293/mt) for second grade coke. Meanwhile, the mainstream prices in the eastern China coke market are at RMB 1,950-2,000/mt ($286-293/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 the context of the continuing sluggishness in the local finished steel market, the Chinese coke market has been characterized by a weak performance on the whole during the past week. According to coking enterprises in the provinces of Shanxi and Hebei, a certain slowdown has been observed in trading activity in the coke market following the reduction seen in demand from the steel mills. Considering the continuous decrease in steel prices and also the freezing weather conditions, some medium and small mills in the north have decided to cut their outputs, thus resulting in a further slide in the volume of coke purchases. Based on the current situation, in the short term domestic coke quotations in China are likely to remain more or less stable with a weak tendency.
In December, China's coke production totaled 32.5598 million mt, up four percent month on month and up 48.1 percent year on year. On the other hand, the country's total coke production in 2009 amounted to 350 million mt, up six percent compared with the previous year. Meanwhile, the coke production in Shanxi Province reached 7.2463 million mt in the month of December, with overall coke production in the province in 2009 coming to 76.4935 million mt. Thus, the share of Shanxi coke production in relation to the national volume dropped from 44 percent in 1998 to 22 percent in 2009; meanwhile, the combined share of Hebei, Shandong, Shaanxi and Inner Mongolia in the national coke output increased from 15 percent in 1998 to 35 percent in 2009.