SHANGHAI, Oct. 21 (SMM)--
Coke prices met resistance as steel prices continued to drop recently, so coking enterprises are in the face of great downstream pressure. The release of resource price regulation fund and resource tax also lowered the possibility of coking enterprises to adjust prices. Downstream movements will gradually transfer to the coking coal market, so coking coal prices will hold firm at high levels. Given the weakening downstream market, any declines in coal prices will be limited.
Domestic coke prices remain steady recently, with slight declines seen at some plants. Downstream steel market continued to weaken, with spot transactions muted, so steel plants all cut their steel prices. In order to mitigate cost pressure, steel plants plan to cut coke procurement prices, or cut output for maintenance, weighing down coke prices. But since coking coal prices are still at high levels, coking enterprises cut back output, keeping inventories at low levels, such as to reduce losses. In the face of pressure from steel plants, coking enterprises will likely cut coke ex-work prices. Steelease believes coke prices should fall in the foreseeable future, but with any declines limited due to support from coking coal prices.