SMM daily comment on domestic coking coal and coke market (Aug 29)

SHANGHAI, Aug 29 (SMM) –

Coking coal market:

The gradual resumption of some coal mines in Shanxi drove the supply to grow. Affected by Shaanxi coal mine accidents, safety inspections were further tightened, so some coal mines with potential safety hazards may stop production. Downstream coke steel companies were less willing to purchase, and the wait-and-see mood was stronger. The pressure of coal mine shipments led to the weakening of some coal prices.

Coke market:

Fundamentally, the first round of coke price cuts caused raw coking coal prices to fall simultaneously. The profitability of coal enterprises was restored and the enthusiasm for production was not diminished. However, traders stopped purchasing and actively shipped, as well as steel mills’ prudent purchases, resulting in a gradual loosening of coke supply and shipments of some coke companies slowed down. The operating rate of steel mills remained at a relatively high level, and the rigid demand for coke still existed. However, the shrinking profit of steel mills and the recent implementation of crude steel production restrictions brought about purchased-on-demand status in coke market.

Overall, traders rushed to sell and some coke enterprises accumulated a small amount of inventory. And coking coal prices decline further has weakened cost support, so short-term coke market is expected to be under a downward trend.