Coking Coal Prices Weaken Again, Year-End Market Remains Pessimistic [SMM Analysis]

Recently, coking coal prices in some regions have weakened again. Under the influence of year-end downward fluctuations in coking coal prices and inventory pressure from some coking coal manufacturers, coking coal prices in Ningxia have continued to fluctuate downward.

After leading coking coal manufacturers in Ningxia recently adjusted the prices of raw coal and coking coal downward, the prices of local washing plants in Ningxia were further affected. However, most manufacturers did not fully follow the price cuts of the major factories, instead adjusting coking coal prices downward to varying degrees. Due to the approaching year-end and the current shutdown of many silicon metal manufacturers in south-west China, domestic demand for coking coal is mainly supported by silicon enterprises in north China. With a wide variety of coking coal available in north China and extensive supply options, the market demand for Ningxia coking coal in the north has been significantly divided by coking coal from other regions, leading to considerable competitive pressure. Similarly, as the year-end approaches, the cold winter climate in the north and the subsequent tightening of transportation capacity have led northern silicon enterprises to habitually stockpile raw materials in advance, usually completing their raw material reserves for the next two months around mid-December. Therefore, the future demand for coking coal from northern silicon enterprises is also expected to be weak. Overall, the demand support for coking coal in Ningxia is very weak, and some washing plants have reported that the coking coal segment remains weak at year-end. Under pressure from end-use sectors, prices may continue to decline, and the prices of raw coal at the mines may be affected to some extent. The overall market outlook remains pessimistic.

However, as the year-end approaches, most washing plants, including mines, have basically completed their production and sales targets for the year. Some manufacturers have indicated that the likelihood of further price cuts following the mines or leading factories is relatively small, mainly because this year's orders have been basically completed, and the current coking coal prices have reached extremely low levels, making further price adjustments highly unlikely.