China’s coke market posts stable trend

China's domestic coke market generally indicated a stable movement over the past week, accompanied by normal levels of trading on the whole. Following the recovery of coke production, market supply and demand have gradually reached equilibrium, leaving limited room for further ascension of prices in the future.

The Chinese coke market moved on a stable trend throughout the past week. At present, the mainstream quotations of second grade coke from large producers in Shanxi Province are in the range of RMB 1,700-1,750/mt ($249-256/mt), while Hebei Province-based mills have kept their purchase prices at RMB 1,750/mt ($256/mt) for second grade coke. Meanwhile, coke prices in Pingdingshan, Henan Province are at RMB 1,650/mt ($242/mt), with the mainstream prices in the eastern coke market at RMB 1,800-1,850/mt ($264-271/mt), an increase of RMB 50/mt ($7/mt) week on week. In addition, the mainstream prices of coking coal in the domestic market are still in the range of RMB 1,200-1,300/mt ($176-190/mt).

Against the background of a smooth trading performance, coke prices in the domestic market were generally stable in the past week. With an overall increase of RMB 60/mt ($9/mt) registered in mills' purchase prices in the month of July, most Chinese mills still appear to be interested in purchasing coke in the context of the bullish finished steel market. However, considering the relatively high coke inventories at the mills, many market players think that there is not sufficient momentum for coke prices to climb up further. Meanwhile, given the support of high coal prices and the active finished steel market, it also appears impossible for coke prices to slip down in the short term. Therefore, the Chinese coke market is expected to maintain its stable movement in the near future.

Additionally, in June China's coke production totaled 31.7231 million mt, up 4.0488 million mt or 14.6 percent month on month, and up 1.9547 million mt or 6.6 percent year on year.