Coking Coal Prices Stabilised after National Day Holiday

SHANGHAI, Oct 8 (SMM) - Coking coal market: With the 20th National Congress around the corner, the safety inspections across the country are more stringent. This, coupled with the National Day holiday break and the impact of the pandemic, prompted some coal mines to curtail output or even suspend the production. As a result, the supply of coking coal has tightened, providing a strong support for coking coal prices. However, steel enterprises also slowed down the procurement of coking coal, and coal mines focused on executing old orders. The bullish sentiment abated, and quotations basically stabilised.

Coke market: On the supply side, the mainstream steel mills in Shandong and Hebei provinces raised the purchase prices by 110 yuan/mt for coke dry quenching, 100 yuan/mt for coke wet quenching. The success of the first round of coke price hike helped restored some profits of the coking companies, but the costs of raw materials were still high. Currently, the coke enterprises were making stable shipments, and the coke inventory stayed low. On the demand side, the operating rates of steel mills stabilised at highs, which indicated that the rigid demand for coke still existed. In addition, the steel prices have risen slightly recently, so steel mills still purchased coke as needed.

On the whole, the pig iron output in steel mills remained high, suggesting a high demand for coke. The supply and demand of coke was relatively balanced, but the sales of steel were poor, hence the coke prices are expected to remain stable in the short term.