Supply Of Coking Coal May Be Tightened

In coking coal market, affected by the safety accident in Luliang, all production and construction coal mines in Shanxi will carry out a month-long safety inspection, and the supply of coking coal may be tightened. Rising demand from coke plants led coal companies to ship smoothly. Therefore, some high-quality coal stocks in individual regions were low, and there may be expectations for another increase.

In coke market, Inner Mongolia Yuantong Coal Chemical Group who suffered great losses raised coke price by 100 yuan/mt. Risun Marketing Co., Ltd. raised the price of wet coke quenching by 50 yuan/ton and dry coke quenching by 60 yuan/ton from 0:00 on June 21. The first round of coke price increases started.
On the supply side, cost support for coke prices strengthened, but this also led to a downward pressure on the profits of coke plants. As coke plants had relatively smooth shipments, and coke stocks were low in many places. Thus some coke plants were reluctant to sell and wait for increases.
On the demand side, steel prices continued to rise, and profits of steel mills quickly recovered. Pig iron production hiked, increasing demand for coke.
On the whole, strong replenishing demand from steel mills drove coke plants to improve their shipments. At the same time, coking coal prices trended higher, and the coke market appeared good. It is expected that the coke market may swing on a strong note in the short term.