Coke Prices to Dip in the Short Term

SHANGHAI, Feb 6 (SMM) -

Coking coal market: The output of coal mines rose with the production resumption, while the downstream enterprises were not keen on purchasing. As a result, the overall supply of coking coal added, and the quotations of some coal varieties declined further.

Coke market: On the supply side, the falling coking coal prices saved some costs of coking companies, but some companies who were still losing money were reluctant to produce. The sales of coking enterprises has improved, and the coke inventory continued to decrease. On the demand side, as steel mills started to resume the operation, they were more active in stockpiling coke after previous stocks were digested.

On the whole, steel mills maintained high operating rates and ramped up the purchase of coke. The falling coke inventory as a result of growing sales of coking enterprises contributed to a more balanced supply-demand structure. But the cost support for coke prices has weakened, and steel mills want to force down the coke prices further on falling steel prices. Therefore, it is expected that coke prices will trend lower in the short term.