Short-term Coke Market Is Expected To Remain Stable

SHANGHAI, Oct 8(SMM) –

Coking coal:

Yesterday, low-sulfur coking coal in Lvliang, Shanxi was quoted at 2,100 yuan/mt, while the quotation was 2,400 yuan/mt in Linfen and 2,100 yuan/mt in Tangshan.

Since coal mine safety accidents occurred frequently during the National Day holiday, safety inspections may be further tightened. Mines faced little inventory accumulation pressure and were mainly working on the delivery of previous orders. Downstream market was resistant to some high-priced coal products and was relatively cautious in purchasing. Therefore, the short-term coking coal market is expected to remain stable.

Coke:

The national average price of first-grade metallurgical coke-CDQ was 2,670 yuan/mt, the national average price of quasi-first-grade metallurgical coke-CDQ was 2,530 yuan/mt, the national average price of first-grade metallurgical coke-wet quenching was 2,240 yuan/mt, and the national average price of quasi-first-grade metallurgical coke-wet quenching was 2,158 yuan/mt.

In terms of supply, although coke companies maintained production during the holiday, coal cost was still high, causing most plants to hold low intention to increase output. In addition, Shanxi’s shutdown of backward production capacity before National Day and frequent accidents recently led to a supply shrinking. Coke shipments were smooth and transportation was basically unacted, resulting in thin inventories in most factories. In terms of demand, steel mills in many places began to suspend production for maintenance before entering October due to losses, and the peak-season performance of steel fell short of expectations. In the later period, steel plants’ maintenance scope may further expand, and the rigid demand for coke will decline accordingly.

Overall, coke production restrictions will maintain cost support. Since the current high pig iron output fosters an acceptable demand for coke, the short-term coke market is expected to run steadily.