Coke Enterprises Propose a Third round of Price Hike

SHANGHAI, Oct 11(SMM) –

Coking coal:

Yesterday, low-sulfur coking coal in Lvliang, Shanxi was quoted at 2,100 yuan/mt, while the quotation was 2,400 yuan/mt in Linfen and 2,100 yuan/mt in Tangshan.

Another coal mine accident occurring in Shaanxi on Monday caused safety inspection to be tightened, so coking coal supply dipped accordingly. Downstream coking companies were cautious about purchasing high-priced coking coal, while coal mines mainly focused on producing for the large number of pre-sale orders. There were basically no new transaction prices and quotations remained stable.

Coke:

The national average price of first-grade metallurgical coke-CDQ was 2,670 yuan/mt, the national average price of quasi-first-grade metallurgical coke-CDQ was 2,530 yuan/mt, the national average price of first-grade metallurgical coke-wet quenching was 2,240 yuan/mt, and the national average price of quasi-first-grade metallurgical coke-wet quenching was 2,158 yuan/mt.

In terms of supply, coke enterprises stabilized their operations and shipped smoothly. In-factory coke inventories remained low. In addition, Shanxi will shut down all 4.3-meter coke ovens before the end of October, so coke supply shrank largely. In terms of demand, steel prices continued to fall recently, but pig iron production stayed high, so steel mills had a rigid demand for coke.

Overall, although profits of steel mills were average, pig iron output remained high. In addition, under the expectation of the elimination of 4.3-meter coke ovens in Shanxi, coke supply maintained a tight state, raising coke companies’ willingness for the third price hike. The short-term coke market is expected to remain a stable-to-stronger trend.