Chinese coke prices still vary between stability and increase

Chinese domestic metallurgical coke market has continued to vary between stability and increase during the past week. Currently, domestic coking coal supplies are still on the short side. In addition, import coking coal prices have also moved up, increasing the production costs for coke. Some domestic coking enterprises have stocked up in anticipation of further increases in coke prices.

During the past week, mainstream quotations of second grade metallurgical coke from large scale producers in Shanxi Province have been at RMB 1,780-1,850/mt ($270-281/mt), while quotations for first grade metallurgical coke in the province are standing at RMB 1,950/mt ($296/mt), up by RMB 50/mt ($8/mt) week on week. Meanwhile, the purchase prices of Hebei Province-based mills are at RMB 1,900-1,950/mt ($289-296/mt) for second grade metallurgical coke, unchanged week on week. The mainstream prices in the eastern China coke market are at RMB 2,100-2,200/mt ($319-334/mt), unchanged week on week, while prices in northeastern China are at RMB 1,900-2,000/mt ($289-304/mt), also unchanged week on week. In addition, the mainstream prices of coking coal in the overall domestic market are at RMB 1,500-1,650/mt ($228-250/mt), up slightly week on week.

Looking at the current situation, domestic coking coal supplies are still tight as most coal mines have suspended production in line with the approach of the Chinese New Year holiday, and so the production costs for coke have risen. In addition, as the domestic steel market has continued to gain strength, domestic coking enterprises have gradually stocked in anticipation of further increases in coke prices after the holiday.

According to the preliminary data issued by China's National Bureau of Statistics, in 2010 China's coke production saw a 9.1 percent year-on-year increase to 388 million mt. In December 2010, China's output of coke came to 34.2 million mt, down 2.3 percent year on year.