The ongoing downtrend in the global steel market and the unfavorable situation locally have continued to weigh on sentiments in the Chinese steel and raw materials markets. Specifically, Chinese steelmakers have continued to implement maintenance works and to reduce their steel outputs in order to avoid incurring even higher losses. Such developments contribute to a certain weakening of support for coke prices. With inventories increasing lately due to very weak demand, Chinese coking plants have had no other choice but to accept lower prices. In particular, this week local coke prices in China have declined further for the fourth consecutive time by RMB 400/mt ($59.3/mt). Given the very adverse business environment, a few coking plants have opted to cut their production by 25-50 percent.
Accordingly, coke prices in Tangshan have settled at RMB 2,460/mt ($364/mt) ex-warehouse, moving down by RMB 400/mt ($59.3/mt) compared to July 15, according to SteelOrbis’ data.
In the futures market, sentiments have remained bearish likewise, notwithstanding some rebound in prices by the end of this week. As of Friday, July 22, coking coal prices at Dalian Commodity Exchange (DCE) are at RMB 2,513.5/mt ($372/mt), up by RMB 62/mt ($10/mt) from the previous day, while coke futures prices are at RMB 2,628/mt ($389/mt), increasing by RMB 76/mt ($12/mt).
$1 = RMB 6.7503