China: Spot met coke market remains under pressure despite uptick in futures

• DCE coke futures gain on rally in global crude oil 
• Mills slow down coke buying, supply glut persists

Mysteel Global: Gains in the futures market failed to help improve the bleak Chinese spot metallurgical coke segment on 16 June, with downward pressures persisting in the near term, Mysteel Global observed. On Monday, the national composite met coke price assessed by Mysteel stayed flat from the previous session at RMB 1,171.9/tonne (t) ($163.2/t), including the 13% VAT.

In the derivatives market, major ferrous futures received gains alongside the recent rallies in international crude oil prices. For met coke, the most-traded contract for September delivery on the Dalian Commodity Exchange rose by 1.9% from the previous session to close its daytime trading session at RMB 1,371/t.

However, upticks in futures prices did not change the bleak fundamentals of the spot met coke market, where a grave supply-demand mismatch persisted, a Shanghai-based analyst said.

Chinese steelmakers’ demand for met coke remained sluggish as of yesterday. Sources in East China’s Shandong noted that mills in the region had further slowed down their procurement of met coke, alongside a more cautious attitude prevailing among them.

According to Mysteel’s latest surveys, coke stocks among Shandong-located steel mills totalled 737,500 t as of 12 June, almost the lowest level so far this year.

At present, steelmakers in Shandong have a strong intention to pare their purchasing prices for met coke in the future, sources added. While the supply glut of met coke continues, steelmakers will also have more leverage in price negotiations with coke producers, Mysteel Global notes.

On 16 June, the prevailing offers for dry-quenching quasi-first-grade met coke in North China’s Shanxi province stayed unchanged from the last session at RMB 1,175-1,245/t, and those for dry-quenching quasi-first-grade coke in Shandong province were RMB 1,365-1,435/t, on an exw basis with VAT included, according to Mysteel’s assessment.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.