China's metallurgical coke market followed a stable trend last week. China's Shandong Province saw improved coke sales in the week in question. Meanwhile, coking coal prices have been indicating weakness in Hebei Province due to wider availability of lower grades of coal and limited availability of funds. It is difficult for coke prices to rise given the sluggishness of the domestic steel market. While some steel mills' purchasing prices for coke increased by a small extent at the beginning of this month, transacted tonnages have continued to remain at low levels. After the main coke contract (J1109) at Dalian Commodity Exchange hit a peak of $370/mt at the end of the previous week, the price had declined to $362/mt at the close of business on Thursday last week.
There has been no change in prices of second grade coke in the main regions of China, with the average offer prices for second grade material currently at $297/mt across China.
Outputs of Chinese steel mills have been negatively affected by the restrictions on electricity consumption, and this also hinders upward movement of domestic coke prices. Coke enterprises in China are barely able to break even in the current market situation. Amid oversupply, small coke producers are under increasing pressure to merge with larger companies.