- Shanxi coal output cuts boost met coke market sentiment
- Producers plan price hikes as supplies may shrink further
Mysteel Global: Positive news spreading in China’s metallurgical coke market on August 6 intensified market participants’ anticipation of coal supply reduction and firmer cost support for met coke prices, boosting sentiment in both the spot and futures markets.
Two days ago, suspension of a coking coal mine, with an annual capacity of 2.4 million tonnes in Linfen city, North China’s Shanxi province, sparked many players’ expectations that the cutback move may expand to more coal miners in Shanxi, the country’s major coal producing province, in response to the National Energy Administration’s ongoing crackdown on domestic coal overproduction, as reported.
Meanwhile, some mines in Lvliang city of Shanxi were also heard reining in their production recently. Although sources noted that the overall output reduction in Lvliang was quite limited, market sentiment was still boosted, alongside the rampant anticipation for tighter coal supplies and firmer cost support for met coke prices in the coming months, according to market sources.
Amid the positive mood, some coke producers have started planning for another price hike on met coke, but the timing and extent of the increase have not been determined as of now, sources said.
Previously, coke producers had successfully pressed their steelmaker customers to accept 5 rounds of price hikes since July 11, adding Yuan 250-275/tonne ($34.8-38.3/t) to their selling prices, as reported.
On Wednesday, Mysteel’s assessment of the national composite met coke price remained flat from the previous session at Yuan 1,359.1/t, including the 13% VAT.
The derivatives market also performed strongly the same day. The most-traded met coke contract for September delivery on the Dalian Commodity Exchange rose 2% from Tuesday’s settlement price to end the daytime trading session at Yuan 1,644.5/t.
Such bullishness also encouraged portside traders to offer their met coke products at higher prices. Yesterday, Mysteel’s assessment showed that the price for first-grade met coke (ash 12.5%, sulfur 0.65%, CSR 65%, MT 7%) rose Yuan 20/t from the last session to reach Yuan 1,520/t, and that for quasi-first-grade met coke (ash 13%, sulfur 0.7%, CSR 60%, MT 7%) increased by the same degree to Yuan 1,420/t, both on an ex-stock basis at Qingdao port in East China’s Shandong province, including the VAT.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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