Aiming to offset the consequences of shrinking profitability, Chinese steelmakers have maintained their efforts to decrease their production costs. In particular, this week they have requested a cut in prices for metallurgical coke for a fourth time. Chinese coke plants, in their turn, have been forced to reduce their capacities.
On balance, after the recent revision, coke prices in Tangshan have settled at RMB 3,060/mt ($454/mt) ex-warehouse, down by RMB 200/mt ($29.7/mt) compared to May 20.
Chinese buyers have remained inactive in imports of coking coal given the developments in the local coke market and given the ongoing bearishness in the Australian coking coal market, coupled with the unfavorable positions of Russia-based suppliers due to the sanctions imposed by the West. No fresh bookings have been heard by the time of publication. According to estimations, ex-Russia K10 coking coal is available at far below $300/mt CFR.
Meanwhile, at Dalian Commodity Exchange (DCE), as of Friday, May 27, coal futures prices declining by 4.1 percent on week-on week basis, to RMB 2,559/mt ($382), coke futures prices have decreased by RMB 124.5/mt ($18.5/mt) or 3.6 percent to RMB 3,351.5/mt ($497/mt) in the same period.
$1 = RMB 6.7487