Coke prices in Shanxi continue to slip

Remaining on its previous sliding trend, the Chinese coke market observed a certain decline in mainstream prices in the various regional markets over the past week. Considering the sharp shrinkage in coke demand, various coking industry associations again advised coking enterprises to cut their production. In February, China's coke production totaled 24.2383 million mt, up slightly compared with the previous month.

Last week, domestic coke prices in China remained on their downward trend. At present, the mainstream quotations of second grade coke from large producers in Shanxi Province are down to RMB 1,450-1,500/mt ($212-220/mt), while the prices of coke in Huaibei, Anhui Province have decreased RMB 100/mt ($15/mt) or so to RMB 1,500-1,600/mt ($227-234/mt). Meanwhile, the purchase prices of second grade coke announced by mills in Tangshan are down to RMB 1,600/mt ($234/mt). In addition, the market prices of coking coal in Shanxi Province are still in the range of RMB 1,150-1,200/mt ($168-176/mt).

Given the current weakness of the finished steel market, Chinese mills again carried out cuts or halts to their production, leading to a sharp reduction in domestic coke demand. Coking enterprises in Shanxi and other regions have already come under obvious sales pressure due to the shrinking trading volume. Looking at the current situation, China's domestic coke market is unlikely to see any improvement in demand in the short term. In addition, affected by cost pressure, coking enterprises in Shanxi and Hebei have had to suspend production in a bid to adjust the relationship between supply and demand.

In February, China's coke production totaled 24.2383 million mt, up 845,400 mt month on month and down 3.0 percent year on year. In the January-February period, coke production amounted to 47.6312 million mt, down 6.3 percent year on year.