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The weakening of coking coal prices has affected silicon coal prices in some regions [SMM Analysis]

iconOct 28, 2024 10:44
Source:SMM
Due to the recent weakening of coking coal prices, silicon coal prices in Ningxia started to drop back slightly from the 25th, reversing the previous upward trend.

Due to the recent weakening of coking coal prices, silicon coal prices in Ningxia started to drop back slightly from the 25th, reversing the previous upward trend.

As the coking coal market has been weakening recently, Shandong Energy lowered its raw coal prices by 40 yuan/mt on the 24th, and silicon coal prices dropped by 10 yuan/mt on the 25th. The smaller decrease in silicon coal prices compared to raw coal is mainly because Shandong Energy did not follow the previous price increase of raw coal in Ningxia's washing plants. Therefore, after the raw coal price reduction, silicon coal prices only dropped back slightly.

Other washing plants in Ningxia also followed the raw coal price decrease, lowering their silicon coal prices by around 40 yuan/mt on the 25th. Currently, the price of silicon coal (granular coal, ash content 5-6%) in Ningxia's washing plants is around 1,850 yuan/mt. Besides the weakening coking coal prices on the cost side, downstream demand also lacks momentum. From the 20th, silicon enterprises in Sichuan and Yunnan, including Liangshan, Baoshan, Dehong, and Nujiang, have started to reduce production and shut down furnaces. Most of the operating silicon enterprises plan to completely shut down by the 31st. The overall demand for Ningxia's silicon coal from Sichuan and Yunnan has significantly weakened. Future demand for Ningxia's silicon coal will mainly rely on northern silicon enterprises. However, the north saw a concentration of top-tier enterprises, with many large electric arc furnaces, primarily using non-caking silicon coal mixed with caking silicon coal for smelting. Overall, Ningxia's silicon coal may face a weak supply and demand situation in the short term, and local washing plants will face renewed production resistance. SMM will continue to monitor the subsequent price trends.

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