- Coke producers’ profits worsen after coking coal price rally
- Recent coke price hike insufficient to offset producers’ losses
Mysteel Global: Metallurgical coke production in China is expected to slow further in February 2026, driven by coke makers’ poor profits and limited demand from steelmakers, Mysteel’s new monthly report on the commodity predicts.
Compared with early January, the average output of met coke during 22-28 January among the 230 independent producers under Mysteel’s nationwide survey had eased by 1.2% to 495,100 tonnes (t)/day.
The report expects this downtrend to extend into February, the slide being a symptom of the prolonged margin losses that began impacting the coke makers’ operations last month.
Profits among the coke producers worsened following the strong rebound in their costs for coking coal, as Mysteel Global reported. Domestic coking coal prices steadily rose early last month as rumours began spreading in the market on 7 January about coal production capacity cuts in Northwest China’s Shaanxi province, prompting fears of tighter coal supplies.
According to Mysteel’s assessment, by 21 January, the national composite coking coal price had reached RMB 1,306/t ($187.9/t), up 3% from end-December and marking the highest level in over a month. While the price had retreated to RMB 1,291.3/t as of 30 January, it was still higher by 1.9% from end-December.
With cost-side pressures mounting, the 30 merchant coke makers under Mysteel’s regular tracking experienced a large climb in their margin losses. As of 29 January, they were losing an average of RMB 55/t on coke sales, almost quadrupling the RMB 14/t loss they were suffering in early January.
Although the coke makers won an RMB 50-55/t increase from their steelmaker buyers for all met coke products effective from 30 January (their first rise of the year), the report warned that the increase was not enough to completely offset the coke makers’ severe losses, leaving most still in the red amid resilient coking coal costs.
While persistent losses continue to frustrate the coke makers, slower purchases from steelmakers are expected to further dampen their production enthusiasm this month.
As the Chinese New Year (CNY) holiday over February 15-23 is only two weeks away, the report warns that steelmakers may slow their replenishment of met coke after building up enough inventories for smooth production during the holiday break, when traffic congestion may disrupt deliveries of raw materials.
Over the past six weeks, the combined met coke stocks held by 247 blast-furnace mills under Mysteel’s survey had risen steadily to reach 6.78 mnt as of 29 January, the highest level since mid-March last year.
A Shanxi-based analyst predicted that prior to the start of the holidays, the 247 mills should secure sufficient met coke stocks for 13-14 days of use. However, by late January, the mills were holding enough coke in inventory to cover their consumption for 12.5 days, according to Mysteel’s data, indicating limited replenishment demand for the raw material from steelmakers going forward.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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