Slight increase observed in China’s coke market

Over the past week, China's metallurgical coke market has registered an overall but slight increase. Since the coking industry associations in various regions have on average raised the guideline coke prices for May by RMB 100/mt, the mills are now in wait-and-see mode due to their higher input costs. It is still too early to say whether the latest price increase will be accepted by the steel producers.

The Chinese coke market has observed an overall slight increase during the past week. The mainstream quotations of second grade metallurgical coke from large scale producers in Shanxi Province have increased by RMB 30/mt ($4/mt) to RMB 1,780-1,830/mt ($257-268/mt), with quotations for first grade metallurgical coke at RMB 1,900-2,100/mt ($279-293/mt), up RMB 50-100/mt ($7-15/mt) in general. Meanwhile, the purchase prices of Hebei Province-based mills are around RMB 1,950-2,000/mt ($286-293/mt) for second grade metallurgical coke, up RMB 50/mt ($7/mt) week on week. The mainstream prices in the eastern China coke market have remained 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 1,400-1,450/mt ($205-213/mt), unchanged week on week.

Although the Chinese coke market has maintained a general upward trend, downstream companies have followed a wait-and-see approach. Due to the tight supply of coking coal and the continuous increase in prices of coking coal, some coking companies have been incurring losses of RMB 200/mt ($29/mt). In this context, Shanxi Coking Industry Association, Hebei Coking Industry Association and Shandong Coking Industry Association have recommended an increase of RMB 100/mt ($15/mt) in the guideline coke price for May; thus, in Hebei Province second grade metallurgical coke is priced at RMB 1,950/mt ($286/mt) ex-works and tax included; in Shanxi Province, the guideline price is at RMB 2,050/mt (FOT, tax included) ($301/mt) for first grade coke with sulphur content of less than 0.7 percent and ash content lower than 12.5 percent; in Shandong Province, the guideline prices have been set at RMB 2,150/mt (FOT, tax included) ($315/mt) for first grade coke (sulphur content of less than 0.6 percent and ash content lower than 12.0 percent) and RMB 2,050/mt (FOT, tax included) ($301/mt) for second grade coke (sulphur content of less than 0.8 percent and ash content lower than 13.5 percent).

Meanwhile, due to the fluctuations observed in the domestic steel market, domestic steel mills are cautious as regards purchase of raw materials such as coke, and so a wait-and-see attitude is likely to prevail in the coke market in the near future.