Bearish Sentiment on Coke Prices is Looming

SHANGHAI, Mar 29 (SMM) - Coking coal market: Downstream enterprises were not motivated to purchase, suppressing the shipment from coal mines. Meanwhile, the online auction transaction prices lowered slightly, with some coal varieties ended with zero deals. 

Coke market: On the supply side, the falling cost of coking coal stimulated coking companies to produce actively, and thus their operating rates rose steadily. However, some coking companies faced a slight increase in inventory due to blocked shipment. As a result, the coke supply became ample.  On the demand side, steel mills were cautious in purchasing as their in-plant coke inventory was sufficient.

On the whole, the cost support for coke prices weakened, and steel mills slowed down the purchase of coke. The mounting pressure on some coking companies to destock seems to give rise to bearish sentiment on coke prices. However, SMM believes that coke prices will not fall in the near term since steel mills’ rigid demand is still robust.