SMM Daily Comment On Domestic Coking Coal And Coke Market (Sep 14)

SHANGHAI, Sep 14(SMM) –

Coking coal:

Low-sulfur coking coal in Lvliang, Shanxi was quoted at 2,050 yuan/mt, while the quotation was 2,100 yuan/mt in Linfen and 2,020 yuan/mt in Tangshan.

Frequent safety incidents led to production reductions at some coal mines, thereby tightening coal supply. The purchasing demand of traders and downstream enterprises was acceptable, so the pressure on in-factory inventory was small. Most coal types were sold at a premium on online auctions but the overall premium was limited, cooling coking coal market sentiment.

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 maintained steady and shipments were smooth, therefore inventories declining. However, due to the increase in coal costs, some coke companies reduced production for profit losses. High pig iron output in downstream steel mills lifted coke consumption. However, owing to sufficient coke stock and shrinking profit, steel mills mainly purchase coke on demand.

Overall, demand from steel mills and procurement by traders allowed coke inventories at coking plants to stay at lows. Cost support boosted some coke companies’ expectations of price increases. However, terminal demand was not activated by the peak season, and the price divergence between buyers and sellers is expected to make coke prices remain stable in the short term.