Retaining its soft trend, the Chinese domestic coke market recorded a mild price decline in the various regional markets over the past week. Against the still relatively high levels of domestic coking coal prices, Chinese coking enterprises are currently facing strong cost pressure. Meanwhile, insiders from the China Coking Industry Association estimate that China's coke demand will shrink significantly in 2009.
Product name |
Specification |
Place of origin |
Average price (RMB/mt) |
Weekly change (RMB/mt) |
Average price ($/mt) |
Weekly change ($/mt) |
Coke |
2nd grade |
Shanxi |
1,450 |
-50 |
213 |
-7 |
Shanghai |
1,550 |
- |
227 |
- |
The Chinese coke market still maintained its previous bearishness during the past week, with a certain degree of confusion observed in market quotations. At present, the mainstream quotations of second grade coke from large producers in Shanxi Province are again down RMB 50/mt ($7/mt) to RMB 1,400-1,500/mt ($206-220/mt), while the prices of coke in Huaibei, Anhui Province are in the range of RMB 1,500-1,600/mt ($220-234/mt). Meanwhile, the purchase prices of second grade coke announced by mills in Tangshan are at the level of 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).
Influenced by cost pressure, mills in various regions have reduced their coke purchases considerably, while some of them have delayed their purchasing plans, thus leading to confusion as regards price levels and to a price drop in the current domestic coke market. Based on the current situation, demand is unlikely to see any recovery in the short term.
According to the newly-released figures, in 2008 China's coke production totaled 327 million mt, down 8.5 million mt or 2.54 percent year on year, the first negative growth in China's national coke production since 1999. Moreover, according to the China Coking Industry Association, due to falling steel production and shrinking exports, domestic coke demand will drop further down this year to the range of 280-290 million mt.
As regards coking coal, domestic prices have continued their steady movement, thus ensuring a continuation of high cost levels for coking enterprises. The stability of coking coal prices is also due to the fact that supplies are mainly controlled by several large-scale coal mines. In the near future, however, China's domestic coking coal market is expected to see a strong downward movement on the back of the continuous decrease in market demand.