[SMM Coking Coal and Coke Daily Briefing] 20261012

[SMM Daily Review on Coking Coal and Coke]

Coking coal market:

Linfen low-sulphur coking coal was quoted at 2,250 yuan/mt.

On the coking coal front, production resumptions at Shanxi coal mines progressed slowly. Some mines were pending acceptance, high-risk mines found it difficult to resume production, and small mines may exit permanently, limiting coking coal output growth in the short term. Steel mills pushed for lower prices amid losses and purchased on an as-needed basis. Coke producers fell into losses due to coke price cuts, prioritized consuming their own coking coal inventories, and showed weak willingness to purchase additional coking coal. In the short term, spot coking coal prices are likely to continue consolidating on a subdued note and hit bottom.

Coke market:

The nationwide average price of quasi-first-grade metallurgical coke with dry quenching stood at 2,200 yuan/mt.

In terms of news, the second round of coke price cuts has been confirmed to take effect at midnight on October 12, with wet-quenched coke reduced by 100 yuan/mt and dry-quenched coke reduced by 110 yuan/mt. On the supply side, coke producers' operating rates continued to rebound and production edged up, but some coke producers still faced production restrictions, and coke inventories at plants remained low. After the two rounds of coke price cuts took effect, coke producers' losses exceeded 100 yuan. Affected by potential losses and expectations of further price cuts, the upside for coke production was limited. On the demand side, hot metal production and daily coke consumption remained stable this week, but steel mills were mired in losses, with insufficient purchasing flexibility and weak rigid demand support. Purchases became more cautious, with most buying controlled volumes based on demand, weakening actual coke demand. In summary, coke supply has recovered somewhat, but profit constraints limited the flexibility to increase production. Demand remained suppressed by deep losses at steel mills. After the second round of price cuts took effect, spot coke prices are likely to remain in the doldrums in the short term, with expectations of a third round of price cuts. [SMM Steel]