China’s coke market posts stable movement but uptrend in the offing

The Chinese coke market basically saw no change in price levels throughout the past week. Coking enterprises in China are operating at full capacity and their inventories are generally at very low levels, while the market is expected to move steadily up in the near term. In addition, China's coke exports reached merely 22,000 mt in the month of May, again hitting an historical monthly low.

Still characterized by general stability, China's domestic coke market has seen a smooth performance as regards sales over the past week. At present, the mainstream quotations of second grade coke from large producers in Shanxi Province are unchanged week on week at the level of RMB 1,550/mt ($227/mt), while Hebei Province-based producers have kept their ex-factory prices constant at RMB 1,650-1,700/mt ($242-249/mt) for second grade coke. Meanwhile, the mainstream prices of coking coal in the domestic market have remained in the range of RMB 1,150-1,200/mt ($168-176/mt), with the prices in some regions up to RMB 1,250/mt ($183/mt).

Given the continuous climb seen in the domestic finished steel market and the gradual expansion of crude steel production, coke consumption is on an increasing trend and the mills have been busy making purchases in recent days. Meanwhile, coking coal prices have climbed up continuously in the context of the postive downstream market and the tight availability of coking coal supply, thus offering a certain degree of support for coke prices. Currently, domestic coking enterprises in the various regions are basically operating at full capacity, with almost zero inventory in their stocks. Considering the brisk downstream demand and the tight coke supply, the Chinese coke market is likely to move steadily up in the near future.

According to the latest statistics from the Chinese customs authorities, China's coke exports in May totaled 22,000 mt, down 12.4 percent month on month and down 99 percent year on year, with the average export price standing at $321.5/mt. Total coke exports in the January-May period reached 206,000 mt, amounting to $73 million in value, with the average export price at $355.3/mt.