[SMM Daily Coking Coal and Coke Review] Supply side, some coking coal prices continued to decline, continuously improving coke plant profits, but most coke plants remained in a loss-making state, leading to decreased production enthusiasm and tightening coke supply. Coke plant shipments slowed down, and coke inventory continued to accumulate. Demand side, blast furnace maintenance increased, steel mill hot metal production continued to decline, and steel mills adopted a cautious attitude toward coke procurement. Coupled with the coke market being in a downward phase and their coke inventory being within a reasonable range, there were instances of controlling arrivals. In summary, the market still holds bearish sentiment, and in the short term, the coke market may operate generally stable with a slight fall, with the possibility of a fourth round of coke price reductions not ruled out.

According to data from the General Administration of Customs compiled by SMM, China's cumulative steel exports from January to November 2025 totaled 121.1127 million mt, up 13.32% YoY. By country, the Philippines remained the largest contributor to the cumulative YoY increase, with exports rising by 1.5523 million mt, a growth of 30.09%.Specifically, among all steel product categories exported to the Philippines in November, coated and plated products surpassed steel billet to take the top spot, accounting for 35% of the total. This differs from October's data, where both categories each accounted for nearly 30% of the total.

For China, the Middle East is demonstrating multiple advantages as a future core engine for exports and industrial cooperation. On the demand side, it benefits from long-term, certainty-driven growth fueled by national-level strategies, transitioning from basic infrastructure to high-end manufacturing. Geopolitically and in trade, the Middle East, with its superior location, advanced logistics, and open policies, is gradually replacing Turkey and emerging as a new trade and logistics hub connecting Asia, Africa, and Europe. Crucially, downstream processing and manufacturing clusters—represented by steel pipes, metal structures, and automotive components—are rapidly forming in the Middle East. Leveraging local low-cost energy and incentive policies, a significant agglomeration effect is taking shape. This five-dimensional combination of "stable demand, hub status, open environment, manufacturing base, and cost advantage" positions the Middle East not only as a crucial export destination for Chinese products but also as a strategic springboard for Chinese enterprises to engage in capacity cooperation, establish regional manufacturing centers, and radiate into broader global markets.

[SMM Daily Coal and Coke Briefing] Supply side, some coke producers saw narrowed profits, dampening production enthusiasm, but recent environmental protection inspections have had a reduced impact, with overall production remaining stable and active shipments as the main focus. However, affected by market sentiment, the shipment pace has slowed down, and coke inventory at plants continues to accumulate. Demand side, steel mills are experiencing poor profitability, and steel consumption performance is average; coupled with most steel mills maintaining moderate coke inventory levels, they are controlling arrivals and showing low purchase enthusiasm. In summary, pessimistic sentiment persists in the market, and the coke market may maintain weak and stable operation in the short term.

[SMM Daily Coal and Coke Brief] In terms of supply, after three rounds of price cuts, coke producers are already operating at a loss, with production stable but declining. However, downstream purchasing enthusiasm remains low, and environmental protection policies have caused shipping obstacles, forcing coke producers to build up inventory. On the demand side, environmental protection-driven production restrictions are being strictly enforced in some regions, leading to a decrease in hot metal output at steel mills and a reduction in rigid demand for coke. Additionally, some steel mills have seen their coke inventory rise to medium-to-high levels, resulting in efforts to control coke deliveries. Overall, market sentiment remains pessimistic, and the coke market is expected to remain in the doldrums in the short term.

Last week, steel prices strengthened amid speculation over events such as production restrictions and coking coal imports. Meanwhile, the much-discussed export license issue in the market has been partially absorbed, with the trading atmosphere recovering mid-week. According to the SMM survey, as of now, the licenses have increased the complexity of export procedures but have not yet imposed substantive restrictions on customers' exports. Additionally, overall market expectations for definitive ticket inspections remain low. Therefore, it is comprehensively estimated that the subsequent impact on purchase orders will be relatively small. However, the final outcome still needs to be assessed after the situation becomes clear on January 1. As of last Friday, China's export offers stood at $460-465/mt for HRC and $437-445/mt for billets.

[SMM Daily Coking Coal and Coke Review] Supply side, the third round of coke price cuts has been implemented, and the decline in coking coal prices has slowed down. Most coking enterprises are operating at a loss, and strict pollution control measures have led to passive production restrictions at some plants, causing coke supply to tighten. Demand side, end-user demand for finished steel remains persistently weak, with daily average hot metal production at steel mills continuously declining, leading to weaker demand for coke and a focus on just-in-time procurement. Overall, the coke supply-demand balance remains relatively loose. Following the third round of price reductions, the coke market may operate in a generally stable manner with a slight fall in the short term.

This week, ferrous metals bottomed out. At the beginning of the week, Hebei initiated a new round of Level II environmental protection response, with some steel mills in Tangshan and Handan adding maintenance plans. Simultaneously, the market digested the news about steel export licenses last Friday, leading to a rebound in futures at the start of the week. In the latter half of the week, the National Development and Reform Commission (NDRC) and five other departments issued the "Benchmark Levels and Baseline Levels for Key Areas of Clean and Efficient Coal Utilization (2025 Edition)". This may accelerate the exit of small and medium-sized coal enterprises from the market in the short term. Additionally, there were market rumors that China Energy plans to suspend purchases of imported coal, fueling expectations of future supply tightening for coking coal and coke, which led the gains. On the spot market side, spot trading volume increased periodically, but remained primarily driven by rigid demand. The spot prices of sheets & plates followed the gains with some weakness, and the spot-futures price spread narrowed somewhat.

[SMM Coal and Coke Daily Brief] News-wise, some steel mills initiated the third round of coke price reductions, cutting wet-quenched coke by 50 yuan/mt and dry-quenched coke by 55 yuan/mt, effective from 00:00 on December 22, 2025. Supply side, environmental protection policies have become stricter recently, leading coke producers to continue passive production restrictions and further reduce coke oven operating rates, resulting in a decrease in coke supply. However, most coke producers still maintain profits, and production enthusiasm remains moderate. Demand side, end-use demand for finished steel products remains weak, causing a seasonal decline in daily average hot metal output at steel mills. Some mills are controlling coke inventory and maintaining just-in-time procurement. In summary, coke demand is still expected to weaken further, and coupled with poor profitability at steel mills, the coke market is likely to remain in the doldrums next week, with expectations for a third round of price reductions.