Cost Support To Coke Prices Weakens

SHANGHAI, Oct 18(SMM) –

Coking coal:

Low-sulfur coking coal in Lvliang, Shanxi was quoted at 2,300 yuan/mt, while the quotation was 2,250 yuan/mt in Linfen and 2,100 yuan/mt in Tangshan.

Suspended coal mines gradually resumed production, and supply recovered slightly. However, against the background of strict implementation of safety inspections, the coking coal supply recovered slowly and continued to be tight. Downstream coke and steel companies maintained on-demand procurement, and traders’ purchasing enthusiasm cooled down. New orders for coal mines decreased, coupled with the recent weakening of online bidding sentiment, and there were a few failures in auctions. Transaction prices of some coal types fell, and the inventories of some coal mines rose.

Coke:

The national average price of first-grade metallurgical coke-CDQ was 2,670 yuan/mt, the national average price of quasi-first-grade metallurgical coke-CDQ was 2,530 yuan/mt, the national average price of first-grade metallurgical coke-wet quenching was 2,240 yuan/mt, and the national average price of quasi-first-grade metallurgical coke-wet quenching was 2,158 yuan/mt. In terms of supply, coke companies were operating well and shipping actively with low inventory pressure. However, cost support weakened slightly, and the third coke price hike may be shelved.

In addition, the elimination of 4.3-meter-high coke ovens in Shanxi was progressing steadily. Some coke ovens already stopped loading coal and were withdrawn early. Coke supply is expected to tighten in the second half of the year. In terms of demand, steel mill’s profits cannot cover costs, so the willingness to accept high-price coke was mute. In addition, blast furnace maintenance plans increased, rigid demand for coke was diminished, and some steel mills became less enthusiastic about purchasing coke. On the whole, the start-up of coke enterprises remained stable, but the losses of downstream steel mills expanded, and production shutdowns increased, causing rigid demand for coke to decline and cost support to weaken. The short-term coke market may remain stable.