First Round Of Coke Price Cuts Could Loom Large

Coal mines generally report poor orders, and some are under inventory pressure. Coking coal prices went down amid weak coke prices. Low-sulfur coking coal was offered at 2280 yuan/mt in Lvliang, Shanxi, versus 2250 yuan/mt in Linyi, Shandong.

The national average price of first-grade metallurgical coke-CDQ is 2,670 yuan/mt. In view of weakening demand, the shutdowns of 4.3-meter coke ovens in Shanxi will have minimal impact on coke market.

While macro bulliness boosted steel prices, most steel mills are still suffering losses, keeping them restocking coke only as needed. Some mills have proposed the first round of coke price cuts. With softening cost support, we see coke prices at downside risk.