First Round of Coke Price Cut Completed

SHANGHAI, Nov1 (SMM) - Coking coal market: Shipment in some areas of Shanxi was still restricted, and downstream steel enterprises were relatively passive in purchasing. As a result, coke mines received few new orders, leading to accumulated coking coal inventories. Quotes of certain types of coal have been lowered.

Coke market:  On the supply side, the first round of coke price cut was completed. Most coking companies suffered losses, and due to the impact of pandemic, coke companies in some areas saw scarce arrivals of coking coal. Therefore, they started cutting the production by 50%, and coke supply is expected to tighten in the short term. On the demand side, the terminal demand for steel was sluggish, and the steel mills suffered more losses amid falling steel prices. The pig iron output was reduced, resulting in lower demand for coke.

To sum up, the arrivals of coke at steel mills improved, leading to increasing coke inventory. At the same time, the recent sharp drop in steel prices further expanded the losses of steel mills, and their willingness to bargain down coke prices was strong. It is expected that the short-term coke prices will decline.