General stability in China’s metallurgical coke market

Over the past week China's metallurgical coke market has generally followed a stable trend. Given the production cutbacks implemented by most Chinese steel mills, demand for coke has continued to decline. Although a significant price increase has been observed in the steel market, coke prices have so far not shown signs of following a similar trend.

Over the past week the mainstream quotations of second grade metallurgical coke from large scale producers in Shanxi Province have remained at RMB 1,550-1,600/mt ($229-236/mt), unchanged week on week, with quotations for first grade metallurgical coke standing at RMB 1,700-1,750/mt ($251-258/mt), also remaining neutral week on week. Meanwhile, the purchase prices of Hebei Province-based mills are around RMB 1,650-1,700/mt ($243-251/mt) for second grade metallurgical coke, unchanged week on week. The mainstream prices in the eastern China coke market are at RMB 1,800-1,900/mt ($265-280/mt), while prices in northeastern China are at RMB 1,650/mt ($243/mt), with no changes week on week. In addition, the mainstream prices of coking coal in the overall domestic market have remained stable at RMB 1,350-1,450/mt ($199-214/mt).

Although domestic steel prices have increased by RMB 200/mt ($29/mt) within only three days, some market players are not optimistic as regards the prospects for the current price uptrend due to the continuing sluggishness of market demand. At present, some coking companies are implementing production cutbacks and stoppages, and are maintaining a cautious approach to the market.

Given the decreased demand in the market in Shanxi, some coking companies in this province have continued to reduce their output levels, by up to 60-70 percent. Some coking companies in Shanxi have continued to sell off their materials at reduced prices, resulting in confusion as regards market price levels in the province.