Latest situation in local Chinese coke market

During the week ending August 11, metallurgical coke prices in the Chinese domestic market have increased, while transaction activity in the overall market has been at decent levels. As of August 11, coke futures contract (1801) offers at Dalian Commodity Exchange closed at RMB 2,167/mt ($325/mt), up $22/mt week on week. Average coke prices in the local Chinese market are presented in the following table.

During the given week, domestic coke producers’ capacity utilization rates have continued to increase, with some coking plants resuming production after suspension due to environmental protection measures. Although transaction activity has been at decent levels, coke inventories held by coking plants have risen slightly. The domestic finished steel market has maintained its upward movement, resulting in blast furnaces’ high capacity utilization rates, which will provide support for coke demand. It is thought that coke prices in the Chinese domestic market will likely move upwards in the coming week.

However, the China Iron and Steel Association (CISA) recently held a meeting with representatives of steelmakers, futures exchanges, futures brokers and steel industry news portals to discuss the rapid price rises in the finished steel market. Subsequently, on August 11, futures prices of iron ore, rebar and hot rolled coil in China have declined compared to the previous trading day. If the declines continue in the coming week, they will likely exert a negative impact on the domestic coke market.

17 percent VAT is included in all prices and all prices are ex-warehouse.

 $1 = RMB 6.67