China’s coke market still depressed

Given the shrinkage of market demand due to mills' production cuts and halts, Chinese domestic coke prices have continued to drop down in recent days. Meanwhile, China's February coke exports totaled just 30,000 mt, marking a new monthly low for recent years.

Last week, domestic coke prices in China remained on their downward trend, against the background of a sluggish trading performance. At present, the mainstream quotations of second grade coke from large producers in Shanxi Province are at RMB 1,550/mt ($227/mt), while the prices of coke in Huaibei, Anhui Province have decreased RMB 100/mt ($15/mt) or so to RMB 1,600-1,700/mt ($234-247/mt). Meanwhile, the purchase prices of second grade coke announced by mills in Tangshan are down to RMB 1,650/mt ($242/mt). In addition, the market prices of coking coal in Shanxi Province are now in the range of RMB 1,150-1,200/mt ($168-176/mt).

As a result of deteriorating demand as well as the slackness in the export market, China's domestic coke market has registered a continuous fall over the past week. Given the bearishness of the finished steel market and also the relatively high levels of coke inventories, mills began to halt their purchases of coke, thereby affecting demand in the coke market to a considerable degree. Looking at the current situation, it seems quite hard for the coke market to see any improvement in the short term, as so many coking enterprises in Shanxi Province have tried to stimulate sales through price reductions.

In addition, China's coke exports have slumped significantly so far in the current year. According to the statistics released by China's General Administration of Customs, coke exports in the January-February period totaled 100,000 mt, a drop of 93.9 percent compared with the export volume of 1.69 million mt during the same period last year. In February, the country's coke exports amounted to just 30,000 mt, the lowest monthly level since 2006.