Posted on 25 May 2021
Chinese domestic metallurgical coke prices continued with their upward momentum although the country’s steel market sentiment weakened this week after earlier strong increases in prices and margins.
CoalMint assessed the latest price for domestic met coke with 12.5% ash in North China at CNY 2,800/t ($442.07/t), up CNY 100/t ($14.06/t) week-on-week.
Coke market observes mixed sentiments
In the Chinese domestic metallurgical coke segment, a major producer in Hebei proposed a ninth round of price uptick by CNY 120/t on 21May’21.
Nevertheless, market participants held different views toward the acceptance of the price uptick proposal. While some stated that steel mills with relatively low inventory levels would still be actively seeking coke, others said the weakness in steel prices and margins might bring downward pressure on coke prices.
Meanwhile, coke plants’ utilisation rates are lower at present due to the recent environmental inspections. The resultant tight supply and firm demand from end-users alongside the strong futures market would support coke prices in the near run.
Coking coal market remains strengthened
With the safety inspections conducted frequently in Shanxi’s Jinzhong and Lvliang areas, the overall operating rate of coking coal is affected. Stockpiling needs of coke plants have slowed down, but price of premium coking coal remains firm. It is expected that coking coal price will remain bullish in the near term.
Meanwhile, the National Development and Reform Commission of the People’s Republic of China (NDRC) announced an indefinite suspension of all activities under China’s Australia Strategic Economic Dialogue, thereby raising questions about the market outlook on imported coals.
Hence, China’s resumption of Australian coking coal imports may be delayed further, and Chinese buyers may continue to book with alternative imports sources as domestic met coke prices have rebounded since mid-April.
In Apr’21, China’s imports of coal and lignite stood at 21.73 mn t, down 29.8% y-o-y; while during Jan-Apr’21, cumulative imports of the same were at 90.13 mn t, down 28.8% y-o-y.
China’s coal output drops 1.8% y-o-y in Apr’21
China’s coal production in Apr’21 fell to its lowest since Jul’20. Raw coal production was 362 mn t in Apr’21, down 1.8% y-o-y. However, total coal output in Jan-Apr’21 stood at 1.29 bn t, up 11% y-o-y. China’s Cabinet has urged coal producers to ramp up output to meet peak demand during summer.
Source:SteelMint
