Coke Prices Likely to Drop amid Weakening Demand

SHANGHAI, Jan 27 (SMM) - On the supply side, after three consecutive rounds of coke price hikes in January, the profits of coking enterprises have increased significantly, heightening the enthusiasm for production. However, considering that coking enterprises may face stricter environmental protection inspections around the Chinese New Year, there is limited room for improvement in coke supply.

In terms of demand, affected by the repeating COVID-19 pandemic and adverse weather like rain and storm, the shipments of coke have been poor recently. From February to mid-March, the Winter Olympics-related production restrictions on steel mills in north China will lead to a decrease in the demand for coke, and the bargaining power is mainly in the hands of steel mills in north China, hence there is few possibility that coke prices will rise post the CNY holiday. The prices of quasi-first-grade metallurgical coke (CDQ) will move between 3,300-3,500 yuan/mt.