Coke Prices Expected to be Stable with Downside Potential in the Short Term

SHANGHAI, Oct 25 (SMM) - Coking coal market: With the conclusion of CPC National Congress, coal mines that had been under production restriction gradually resumed normal production, thus the supply of coking coal increased. At the same time, the pandemic hampered the transportation of some coal mines in Shanxi, where the coking coal inventory accumulated. More online auction of coal ended with no buyers amid bearish sentiment among downstream enterprises. The quotations of coal mines basically remained unchanged.

Coke market: On the supply side, the coke inventories of most coking companies stood at medium to low levels with improvement in the logistics. On the demand side, the pig iron output of steel mills was maintained at a high level, which suggested a strong demand for coking coal. However, steel prices recently declined due to poor transactions, thus some steel mills cut the production. On October 25, Ningxia Iron and Steel Group and some steel mills in Shandong province lowered the purchasing prices for coke.

On the whole, steel mills still had demand for coke, but the poor profits of some steel mills compelled them to cut the production. Therefore, the tight supply eased. Coke prices are expected to be stable with downside potential in the short term.