Chinese met coke prices continue to show uptrend starting May. Prices for 64% CSR and 62% CSR moved up by USD 3/MT and USD 4/MT, FOB China starting the third week of May.
Domestic met coke market is showing a positive gain on account of stricter environmental controls in the Shanxi area (one of the major Chinese steelmaking area). Prices have already seen two round of upticks starting the third week of May by around USD 14-15/MT and market participants are still looking for a potential gain of USD 14/MT later this month.
Market participants shared that volatility in China’s coke market after a steep market correction in March, current prices are showing recovery which can be a major factor keeping domestic prices higher. Also, with China’s steel production growth this year, there will be additional demand for coking coal imports, and China imposing restrictions on imports of Australian coking coal can contribute to one of the causes of price gain.
Chinese coke makers are seeking higher profits margins
In the Chinese domestic coke market, coke manufacturers are happy to see regain in the prices. According to a few market participants, after two rounds of price hike starting the third week of May, the profit level at coke companies has returned to around USD 15-30/MT.
The major reason behind this uptick can be tougher environmental regulations by the Chinese government which is creating pressure on the supply of domestic coke within China according to them. The Chinese government is now taking serious measures to keep air pollution down. These measures are likely included replacing the old coking oven, typically with a capacity of 500,00MT/year, with the new, larger ovens that produce 2 MnT/year.
However, outside China, market participants still reported a muted coke market. While there is thin demand at the moment, market participants expect the market to stay relatively stable for the short term.
Price Assessments for Week 20 (13 May – 19 May 2019)
Prices for 64% CSR and the 62% CSR grades are assessed at around USD 330/MT and USD 317/MT FOB China respectively, increased by USD 3/MT and USD 4/MT from the rates that prevailed in the last week (06 May – 12 May’19).
Indian met coke import prices have also shown an uptick of around USD 3-4/MT as compared to last week and currently hovering at around USD 344.50/MT for 64% CSR and the 62% CSR grades prices at around USD 331.5/MT on CNF India basis.
Meanwhile, a wide bid-offer gap continued in the export coke market as Chinese domestic coke prices continued on the uptrend. A tradable offer was heard at USD 320-325/MT, FOB China for a 64%/62% CSR coke, adding that there were no trades heard yet.
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