SHANGHAI, Jun 5 (SMM) – Some coking plants raised production after their inventories declined, driving up the average capacity utilisation rate up from 77% to 77.5% last week. Steel mills restocked coke only as needed amid sluggish end market. Traders took a wait-and-see approach.
Summer peak season of coal consumption is about to come, but the price of thermal coal failed to rise and even fell, which soured sentiment in the coking coal market. Coking plants and traders slowed down purchases, causing inventory of some mines to accumulate. As a result, the rally of coking coal prices came to an end.
Coke prices may register the 11th round of cuts this week. However, it’s worth noting that most coking plants are now struggling around the break-even point and some have curtailed capacity by 40%. This may tighten supply and support coke prices in the future.
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