Chinese coke market still witnesses weak transactions

In the past week, the weakness in the Chinese domestic metallurgical coke market has prevailed. With Chinese domestic mills coke purchases have remained limited, the market demand has lacked strength and coking enterprises in most regions have started to lower their ex-work prices, although the transaction situation has continued to remain on the low side.

During the past week, mainstream quotations of second grade metallurgical coke from large scale producers in Shanxi Province have been at RMB 1,800/mt ($274/mt), down RMB 20/mt ($3/mt) while quotations for first grade metallurgical coke in the province are standing at RMB 1,950-2,000/mt ($296-304/mt), unchanged week on week. Meanwhile, the purchase prices of Hebei Province-based mills are at RMB 1,950/mt ($296/mt) for second grade metallurgical coke. The mainstream prices in the eastern China coke market are at RMB 2,150-2,200/mt ($327-334/mt), unchanged week on week, while prices in northeastern China are at RMB 1,920/mt ($293/mt), down RMB 80/mt ($12/mt) week on week. In addition, the mainstream prices of coking coal in the overall domestic market are at RMB 1,550-1,650/mt ($236-250/mt), also unchanged week on week.

China's coke market has continued to follow a weak trend in the past week. Due to weak transactions, coke prices declined by about RMB 50/mt ($8/mt). On back of the weak demand for steel products, steel inventories have grown gradually. Eventually, steel mills have started to limit their coke purchases and tried to keep the purchase price low. Having high inventory levels, coking enterprises have been forced to accept lower prices.

In line with the weakness in steel and coke markets, the coking coal market in Shanxi Province has witnessed only a few transactions in the past week and some traders in the region have reduced their prices for certain coal grades. Coking coal supply in Shanxi province has been limited on the back of the limited coal production recovery.