The persistent efforts of Chinese steelmakers to secure raw materials at lower prices in order to mitigate the impact of losses have continued to yield results. On July 28, a fifth round of reductions in local metallurgical coke prices in China was announced. Following the latest decline of RMB 200/mt ($30/mt), metallurgical coke prices in China have fallen by more than RMB 1,300/mt ($193/mt) since the end of June. Although most Chinese coke producers have reduced their production capacities by 30-50 percent, inventories have continued to accumulate. Accordingly, the positions of coke suppliers in China have remained shaky.
The current levels of second-grade met coke prices in Tangshan have settled at RMB 2,260/mt ($335/mt) ex-warehouse.
Meanwhile, the current export offers for 25-90mm of BF grade metallurgical coke (62/60% CSR) have been heard at $380/mt FOB, down around $40/mt during the last two weeks. “Chinese prices are in a freefall. Nevertheless Colombian suppliers are still dreaming and offering nut coke at above $400/mt FOB,” a European trader stated.
On the contrary, prices in the futures market have substantially gained in recent trades, following the emerging of more signs of an economic rebound in China after a rescue fund of up to RMB 300 billion has been implemented. Despite the resilient uptrend in the futures market in China within the current week, most market players remain cautious, admitting that a crisis which could engulf the country’s property developers still exists. One way or another, on Thursday July 28, coking coal prices at Dalian Commodity Exchange (DCE) have settled at RMB 2,173/mt ($322/mt), up RMB 216/mt ($32/mt) since Monday July 25. Meanwhile, coke futures prices have increased by RMB 197.5/mt ($30/mt) to RMB 2,847/mt ($422/mt) in the given period.
$1 = RMB 6.75