SMM Daily Comment On Domestic Coking Coal And Coke Market (Sep 21)

SHANGHAI, Sep 22 (SMM) –

Coking coal:

Low-sulfur coking coal in Lvliang, Shanxi was quoted at 2,100 yuan/mt, while the quotation in Linfen was 2,150 yuan/mt and 2,100 yuan/mt in Tangshan.

Stricter safety inspections impeded coal output increase, so supply-demand imbalance still existed. The start-up of downstream coke enterprises remained at a high level, consuming large amounts of coking coal. Moreover, many transactions at premium prices were completed in online auctions, firmly supporting coal prices.

Coke:

The national average price of first-grade metallurgical coke-CDQ is 2,560 yuan/mt, the national average price of quasi-first-grade metallurgical coke-CDQ was 2,420 yuan/mt, the national average price of first-grade metallurgical coke-wet quenching was 2,140 yuan/mt, and the national average price of quasi-first-grade metallurgical coke-wet quenching was 2,058 yuan/mt.

The first round of coke price hikes allowed coke companies’ profits to recover, but some were still losing money, resulting in production reduction and further shrinking supply. In the downstream market, the high operating rate of steel mills propelled robust demand for coke. Since the National Day holiday is approaching, the purchasing pace of steel mills and traders accelerated. Overall, downstream enthusiasm for inventory replenishment promoted coke shipments, prolonging the inventory decline. Meanwhile, coking cost support was robust. The short-term coke market may maintain a stable-to-stronger trend.