SHANGHAI, Oct 13 (SMM) - The coke market stabilised after performing bullish in September. The met coke prices have risen for four times from September 1 to 15, and increased 720 yuan/mt in September. The market held a bearish outlook on coke prices between September 16 and 30 amid the Mid-Autumn Festival, signs of downward trend of coking coal prices and reduction in crude steel output at steel mills. Mills asked coke prices to fall 200 yuan/mt on September 27, but some coking enterprises raised the price by 200 yuan/mt next day, both of which were at a deadlock. On September 29, the seven major coal companies in Shanxi are required to be responsible for the supply of electricity and coal in 14 provinces, and the supply of coking coal tightened.

The province suffered torrential rain during the National Day holiday, leading to the shutdown of some coal mines for a short period of time. The transportation has been seriously affected. Areas that has been impacted by the heavy rain have not fully recovered as of October 13. Therefore, the inventory of coke at some coking plants accumulated.

On the supply side, the production in Shanxi was normal, but the shipments have still been hindered. The coking plants maintained 50%-70% of production restrictions while those in Tangshan and Handan, Hebei continued to maintain 30%-50% of production restrictions. The overall coke supply has not changed much.

 On the demand side, although the supply and demand of finished steel products weakened, steel mills kept active production enthusiasm as rebar and HRC gained profits of 900 yuan/mt. Some blast furnaces in Jiangsu planned to resume 30-50% of operation, ramping up the demand for coke; In terms of raw materials, coal mines in Shanxi still focus on ensuring electricity-coal supply. The inventory of some coal types has accumulated as the shipments have been hindered by the torrential rain, driving the coal prices to decrease. The prices of main coking coal (A9, S0.5, G85) have dropped from an average of 4,200 yuan/mt to the current average of 3,900 yuan/mt.

The coke supply is likely to be stable in October. The demand for coke from mills increased amid high profits and the resumption of production for some blast furnaces. The overall coke prices are expected to stabilise. Mills in Hebei are likely to be subject to production restrictions and some mills even face suspension of production amid the Winter Olympics and the environmental protection policies. Therefore, the demand for coke is expected to fall sharply. The coke prices are expected to be weak in the long term due to the decline in coking coal prices.