The Chinese domestic metallurgical coke market strengthened this week with the third round of price hike proposed by coking plants having been accepted by some steel mills.
CoalMint assessed the latest price for domestic met coke with 12.5% ash in North China at CNY 2,220/t ($350.27/t), up CNY 70/t ($12.76/t) on the week.
Recently the frequent environmental inspection in Shanxi areas together with the shutdown of obsolete capacity has seen the operating rate of some coking companies go down. The downstream traders are active in taking position. It is expected that coke price in the short term may remain bullish.
During April 11-21, five inspection squad organized by the department of emergency response conducted uninvited and random inspection on collieries in Shangxin province and reprimanded 4 mines to close down for rectification on potential operational risks.
Third round coke price hike accepted
On April 28, the purchase price of coke by mainstream steel mills in Shandong province increased by CNY 120/t. After price revision, the supply of the off-grade wet quenched prime coke from within Shandong province is being quoted at CNY 2,563/t.
On April 26, Shanxi Pengfei group proposed to hike CNY 100/t on its coke products of all grades with effect from April 27. This is the start of third round of price hike on coke.
Off-grade dry quenched met coke increased by CNY 100/t and is taken at CNY 2,170/t. Grade II met coke is up by CNY 120/t and is taken at CNY 2,050/t as base price.
With the safety inspection on collieries ratcheting up in many provinces and the hamstrung import from Mongolia caused by Covid, coal inventory has come down to medium-low level, with some coking plants actively working to replenish stock on some categories below alert line. This coupled with the gradual capacity release from new coking furnaces have helped the coal demand to pick up.
Furthermore, the National Energy Administration issued consultative guidance over power generation by wind and photovoltaic means. In 2021, the power generated by wind and photovoltaic means shall account for 11% of the total societal usage of power and will back up each year to reach 16.5% by 2025.
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