- Coke supply seen remaining aligned with steel demand
- Domestic met coke supply may touch 400 mnt next yr
Mysteel Global: China’s metallurgical coke market is expected to see some decreases in both supply and demand next year, according to Mysteel’s newly-published forecast for the coke sector for 2025, with the reduction in demand expected to be largely the same as that of supply. The report says that China’s coke production is unlikely to rise in 2025, as coke producers in the main producing regions are likely to keep their capacity utilisation below 70%. Moreover, coke producers, being positioned in the middle of the production chain, often face disadvantages in price negotiations with steelmakers, which will likely keep their coke margins at low levels, it added.
Additionally, the report expects that during the coming year, coke supply will remain tightly aligned with steelmakers’ demand, with coke firms making gradual production cuts to match the slowing pace of coke consumption.
On the demand side, the report maintains a relatively cautious view, suggesting that steel mill operations are still largely constrained by tight steel margins and seasonal slowdown in demand. However, if new economic stimulus measures are introduced to boost domestic demand next year, the short-lived recovery in steel prices may prompt steel mills to increase their procurement of raw materials, if only temporarily.
The report also indicated that the country’s pig iron output could decline by more than 10 million tonnes in 2025, leading to a 1.6% y-o-y decrease or a reduction of 5 million tonnes in coke consumption.
Meanwhile, domestic met coke supply is predicted to reach around 400 million tonnes next year, declining by about 6 million tonnes, also about 1.6% down on the year, the report said.
Indeed, coke production has already shown signs of decline this year. New data from the National Bureau of Statistics showed that the country’s coke output between January and November reached 447 million tonnes, reflecting a 1% drop from the same period last year.
By the end of this year, the report estimates that China’s total coke production, including metallurgical coke, semi-coke and chemical coke, will reach 478 million tonnes, with met coke production alone expected to decrease by 1.5% on the year to reach 411 million tonnes.
The decline in met coke production this year was mainly due to a sharp drop in coke prices. As of 25 December, the national composite coke price under Mysteel’s assessment sat at only RMB 1,660.4/tonne ($227/t) including the 13% VAT, which was 33.7% lower than at the same time last year.
Looking ahead, a modest rebound in coke prices next year is anticipated, the report notes, as current prices have already hit rock bottom, leaving limited room for a further decline. The price retreats in 2025 are expected to be less severe than those this year where the overall decline is likely to be around 10% from the 2024 level, it adds.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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