SMM Daily Comment On Domestic Coking Coal And Coke Market (Sep 19)

SHANGHAI, Sep 19 (SMM) –

Coking coal:

Affected by the suspension and production restriction of coal mines as well as regular safety inspections, coal output was limited and supply remained tight. Although the coking coal inventories of downstream coke enterprises were low and there was a demand for replenishment, the downstream held resistance to high-priced coking coal, which narrowed the growth range of coking coal prices.

Coke:

Loss-making conditions and environmental inspections led to small production cuts by coke companies and a tightening of coke supply. The procurement enthusiasm of steel mills and traders was acceptable, and coke inventories continued to decline. Therefore, some coke companies were reluctant to sell for waiting for prices to rise. On the demand side, coke inventories in steel mills were sufficient after replenishment in the early stage. However, with the National Day holiday approaching, steel mills still have a certain purchasing demand.

Overall, the coke supply was tight and shipments were good. Increased costs and profit losses led to a strong willingness for coke price hikes. The average profits caused steel mills to have low acceptance of high-priced coke. However, the high output of pig iron supported the rigid demand for coke. Coupled with pre-holiday replenishment needs, the short-term coke market is expected to remain a stable-to- stronger trend.