With trading activity continuing to be brisk, China's domestic coke prices maintained their climbing movement during the past week. Against the background of improved profit margins in various regions, most coking enterprises in China are now producing at full capacity. In addition, an obvious increase has been recorded in mills' coke inventories.
Product name | Specification | Place of origin | Average price (RMB/mt) | Weekly change (RMB/mt) | Average price ($/mt) | Weekly change ($/mt) |
Coke | 2nd grade | Shanxi | 1,630 | 30 | 239 | 4 |
Shanghai | 1,800 | - | 264 | - |
The Chinese coke market has risen steadily throughout the past week. At present, the mainstream quotations of second grade coke from large producers in Shanxi Province are in the range of of RMB 1,600-1,650/mt ($234-242/mt), while Hebei Province-based mills have maintained their purchase prices around RMB 1,700-1,750/mt ($249-256/mt) for second grade coke, with coke prices in eastern China climbing to RMB 1,750-1,800/mt ($256-264/mt). Meanwhile, coke prices in Pingdingshan, Henan Province have risen by RMB 50/mt ($7/mt) to RMB 1,650/mt ($242/mt), with the mainstream prices in the eastern coke market at RMB 1,750-1,800/mt ($256-264/mt). In addition, the mainstream prices of coking coal in the domestic market have remained unchanged in the range of RMB 1,200-1,250/mt ($176-183/mt).
Looking at the current situation, the profit margins of Chinese coking enterprises are on the increase. With the average cost of coking coal delivered to various factories standing at around RMB 1,100/mt ($161/mt), coke producers are now able to make profits of RMB 50-100/mt ($7-15/mt). In the context of the positive trend in the finished steel market, domestic demand for coke is expected to rise further, and so most market players expect the Chinese coke market to continue its climbing movement throughout the month of July.
Currently, apart from the Shanxi-based coking enterprises which are operating at 80 percent capacity, coking enterprises in the other regions are all producing at full capacity. Due to the gradual increase of coke supplies to the domestic mills, Chinese mills have seen an obvious rise in their inventories and are likely to be less interested in making purchases in the future.