Wrestling between Steel Mills and Coking Companies Kicks Off

Published: Jan 29, 2023 14:57 (GMT+8)
Source: SMM
As the wrestling between steel mills and coking companies kicks off, the coke prices are expected to remain largely stable with limited decline.

SHANGHAI, Jan 29 (SMM) - Coking coal market: Coal mines have resumed the operation one after another, which lifted the supply of coking coal. But the downstream demand is generally weak, and traders still stand on the sidelines. At present, the downstream buyers have restocking demand for a certain varieties of coals. Hence, there is a structural shortage of coking coal in the market, and the quotes from coal mines have been flat.

Coke market: On the supply side, most coke companies maintained normal production during the Chinese New Year (CNY) holiday, but some saw their coke inventories climb due to declining transportation capacity.  On the demand side, the delayed arrivals of coke caused the coke inventory of some steel mills to drop slightly. Generally, the steel mills mainly purchased coke on rigid demand, and some steel mills still forced down coke prices strongly to contain losses. 

To sum up, the supply of coking coal has not yet fully recovered, and the downside room for coking coal prices is limited, which means the cost support for coke prices is still holding. However, the coke inventory of most steel mills continues to be sufficient after the CNY holiday, so some steel mills have been tough on lowering purchase prices of coke amid the off-season. As the wrestling between steel mills and coking companies kicks off, the coke prices are expected to remain largely stable with limited decline.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn
For more information on how to access our research reports, please contact:service.en@smm.cn
Related News
[Nucor quarterly guidance points to stronger earnings as firmer steel prices offset higher costs]
9 hours ago
[Nucor quarterly guidance points to stronger earnings as firmer steel prices offset higher costs]
Read More
[Nucor quarterly guidance points to stronger earnings as firmer steel prices offset higher costs]
[Nucor quarterly guidance points to stronger earnings as firmer steel prices offset higher costs]
Nucor (NYSE:NUE) issued quarterly guidance pointing to stronger earnings alongside rising product costs, as firmer steel prices met higher input costs. Steel mills and steel products improved while raw materials softened, underscoring the differing pace across three arms that turn recycled scrap into steel via electric-arc furnaces nationwide. Scrap, energy and alloying costs feed cash costs directly, trimming part of the gain from firmer selling prices. Cooler inflation eased expectations of further rate hikes and the S&P 500 edged higher in early October, though trade measures on imported steel remain unsettled. The stock traded at 235.98 USD, up 2.23 USD, or 0.954%. Nucor keeps expanding and upgrading mills to lift capacity; results later this month will test pricing and costs.
9 hours ago
[Essar Group plans 15 billion USD integrated steel plant in Iowa, targeting 2030 output]
9 hours ago
[Essar Group plans 15 billion USD integrated steel plant in Iowa, targeting 2030 output]
Read More
[Essar Group plans 15 billion USD integrated steel plant in Iowa, targeting 2030 output]
[Essar Group plans 15 billion USD integrated steel plant in Iowa, targeting 2030 output]
India's Essar Group, via US unit Mesabi Metallics, plans to invest 15 billion USD in an Iowa integrated steel plant, targeting first output in 2030. The project was announced at the White House on 28 September by President Donald Trump together with Essar co-founder Ravi Ruia and Mesabi Metallics chairman Rewant Ruia. Phase one is designed for 7.5 million tonnes a year, rising to about 10 million tonnes at full build-out. Upstream supply comes from Mesabi Metallics' new mine at Nashwauk, Minnesota, on which Essar has spent over 2.5 billion USD; it should yield roughly 7.5 million tonnes of iron ore annually and some 350 jobs, the first new US iron ore mine in 50 years. The US Export-Import Bank announced up to 10 billion USD in financing for the mine expansion in September. The plant should create at least 1,750 permanent jobs, plus 6,000 construction jobs, with the White House estimating 95 billion USD of economic impact from phase one.
9 hours ago
[OECD forecasts global steel overcapacity to reach 721 million tonnes by 2027, hindering decarbonisation]
9 hours ago
[OECD forecasts global steel overcapacity to reach 721 million tonnes by 2027, hindering decarbonisation]
Read More
[OECD forecasts global steel overcapacity to reach 721 million tonnes by 2027, hindering decarbonisation]
[OECD forecasts global steel overcapacity to reach 721 million tonnes by 2027, hindering decarbonisation]
The OECD forecasts that global steel overcapacity will climb to 721 million tonnes by 2027, making excess capacity a core obstacle to decarbonisation investment across the industry. AISI welcomed US leadership in advancing and adopting the Global Forum framework on steel excess capacity. European competition authorities approved Trasteel's acquisition of Liberty Steel's Magona plant in Piombino, Italy, continuing the consolidation of European steel assets. Pakistan's Pak Steel is evaluating investment in a new steel plant in Uzbekistan. JISF urged tax reforms to support green transformation and related investment. Taiwan's Froch Enterprise saw earnings driven by semiconductor facility construction demand.
9 hours ago