SMM Daily Comment On Domestic Coking Coal And Coke Market (Sep 13)

SHANGHAI, Sep 13(SMM) –

Coking coal:

Low-sulfur coking coal in Lvliang, Shanxi was quoted at 2,000 yuan/mt, while the quotation was 2,050 yuan/mt in Linfen and 1,940 yuan/mt in Tangshan.

The coal mine safety accident in Linfen caused production suspension, involving a reduction in annual production capacity of approximately 6 million mt, which will further shrink coal supply. At present, acceptable downstream purchasing enthusiasm improved coal companies’ shipments, so in-plant inventories declined to varying degrees and quotations of some high-quality coal types are expected to rise.
Coke:

The national average price of first-grade metallurgical coke-CDQ is 2,450 yuan/mt, the national average price of quasi-first-grade metallurgical coke-CDQ was 2,310 yuan/mt, the national average price of first-grade metallurgical coke-wet quenching was 2,040 yuan/mt, and the national average price of quasi-first-grade metallurgical coke-wet quenching was 1,958 yuan/mt.

Operating rate of coke enterprises was maintained as the previous and coke supply was relatively stable. Besides, the shipments were smooth and there was less inventory pressure. However, due to the increase in coal costs, some coke companies reduced production for profit losses. The high operating rate of steel plants expanded the demand for coke, but the consumption of finished steel was average and coke inventories were sufficient, thus maintaining an on-demand procurement situation in coke markets.

Overall, coke supply and demand maintained a tight balance, while cost support was solid. However, poor profits triggered strong resistance from steel mills to coke price growth. Therefore, coke markets may be temporarily stable in the short term.