Slight price increase in Hebei metallurgical coke market in China

Over the past week China's metallurgical coke market has generally followed a stable trend, with a slight price increase seen in some markets. Due to the price increases for both semi-finished and finished steel, medium- and small-sized mills in China's Hebei Province have been active in purchasing coke, pushing up local coke prices to a certain extent. Meanwhile, a balance between coke supply and demand has been gradually achieved, as the coking companies have implemented strict production cutbacks.

The mainstream prices of coke in China have generally trended neutral in the past week, with the exception notably of Hebei Province. 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 1,680-1,700/mt ($248-251/mt) for second grade metallurgical coke, with the lower end up RMB 30/mt ($4/mt) 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).

Over the past week, in line with the stability in the mainstream coke market, mills in some regions have slightly increased their purchase prices. Due to the strong increase in the steel markets, with most products climbing by RMB 200-300/mt ($29-44/mt), the domestic coke market has been affected to some extent, with some mills in Hebei increasing their purchase price for coke by RMB 30/mt ($4/mt). Looking at the current market situation, owing to the efforts made to restrict output, the supply of coke has been brought into line with demand; nevertheless, the future trend of the coke market will greatly depend on the movement of the steel market.

In June this year, China exported 558,000 mt of coke, up 19.49 percent compared with the previous month. During the January-June period, China exported 1.401 million mt of coke, up 483 percent compared with the corresponding period of 2009. In particular, Shanxi Province exported 480,000 mt of coke in the month of June, accounting for 86 percent of the total export volume of China in the month in question, up 23.2 percent month on month.