SHANGHAI, Jun. 15th (SMM) -- Last week, DCE J1209 coke contract prices opened at RMB 1,799/mt on Monday, with the high end RMB 1,818/mt and the low end RMB 1,725/mt, and closed at RMB 1,747/mt on Friday. Total positions decreased by 1,520 lots to 9,038 lots.
The meeting of OPEC decided its member countries should produce by a limit of 30 million barrels of petroleum every day, with a reason of recession. Petroleum markets are expected to loosen further later in the year. Its member countries have got ready to take measures coping with possible threatens to stabilities in the petroleum market.
Moody's downgraded the rating of Spain by three notches from A3 to Baa3, saying any new bailout funds received by its banking sector will increase debt pressure to the country. Moody's also included Spain in the watch list of further downgrade.
The World Bank said in its report that global economy will face turmoil which will last for years as European debt crisis affect investors' confidence and economic growth. It predicts global economic growth will be only 2.5% this year, the lowest since economic recovery.
China's central bank released that newly increased RMB loans were RMB 793.2 billion in May, higher than RMB 681,8 billion the previous month and the RMB 700 billion expected, pushing loans balance growth up from 15.4%, to 15.7%. The growth of M2 also rebounded from 12.8% in the previous month, to 13.2%, higher than the 12.9% expected.
Spanish Finance Ministry said Monday the bailout fund agreement reached with EU will not affect government bond issuance plan for the remainder of the year.
Domestic Spot Markets:
Last week, coke spot markets remained weak. Hebei Iron and Steel lowered its first-grade metallurgical coke prices by RMB 60/mt to RMB 1,925/mt, with quotes in domestic markets continuing to fall. Coking coal prices fell further, with domestic coking coal in surplus. Large mines in Shandong including Yankuang lowered prices significantly, and coking coal prices should remain weak. Business operation at downstream iron and steel enterprises did not turn around, while previous positive policies were absorbed, and downstream demand will barely support prices to rebound. In addition, steel plants continued to push down raw material prices. As such, coke fundamentals are still negative.
Last week, DCE coke prices continued to fall and hit record lows, with the short momentum stronger. The coke industry did not turn around, and will not improve due to sluggish price trends and pallid downstream demand. DCE coke prices should remain weak. Investors are advised to take a wait-and-see attitude prior to the result of Greece's general election.