While still indicating signs of weakness, China's metallurgical coke market gradually became stable over the past week. It is thought that there is not much room left for further downward movement of coke prices and, with the coking companies in general incurring significant losses, the domestic coke market is expected to follow a stable trend 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 | 1,700 | - | 249 | - |
Shanghai | 1,980 | - | 290 | - |
In the past week the mainstream quotations of second grade metallurgical coke from large scale producers in Shanxi Province have remained at RMB 1,700/mt ($249/mt), with quotations for first grade metallurgical coke standing at RMB 1,850/mt ($271/mt), unchanged week on week. Meanwhile, the purchase prices of Hebei Province-based mills are around RMB 1,800-1,850/mt ($264-271/mt) for second grade metallurgical coke, down RMB 50/mt ($7/mt) week on week. The mainstream prices in the eastern China coke market have remained at RMB 2,000/mt ($293/mt). In addition, the mainstream prices of coking coal in the overall domestic market have remained unchanged at RMB 1,400-1,500/mt ($205-220/mt).
Currently, due to the reduction in profitability, also owing to the rising prices of iron ore, Chinese steel mills have been forced to lower their purchase prices of raw materials such as coke in order to cut production costs.
Looking at the current market situation, in spite of the reduced prices of metallurgical coal in the domestic market, most coking companies have been incurring losses, and so it is thought coke prices will not decline by much in the coming period.
In recent days, Shanxi Province has issued notification regarding the elimination of obsolete coking capacities in the province in 2010. According to the notification, the province will eliminate all disqualified coking capacities (carburizing chamber height less than 4.3 meter, with 3.2 m and above stamp charging coke ovens excluded) within 2010. The plan in question will affect 33 enterprises and will result in the elimination of a total of 7.67 million mt of out-of-date capacities.