Mysteel Global: Sentiment in the Chinese metallurgical coke market remained downbeat on 23 July, affected by the softening futures prices of major ferrous commodities, according to industry sources.
On Tuesday, China’s national composite coke price under Mysteel’s assessment remained unchanged on day at yuan 1,965.4/tonne ($270.2/t) including VAT.
The same day, Chinese futures prices of major ferrous commodities including steel, iron ore, coke and coking coal continued plummeting, with the most-traded coke contract on the Dalian Commodity Exchange (DCE) for September delivery falling for the fifth straight workday by another 2.54% when the daytime trading session ended.
The confidence in coke futures market flagged after domestic steel prices had declined for days. The national HRB400E 20mm dia rebar price slipped for six straight workdays by another yuan 34/t from Monday to yuan 3,502/t and including the 13% VAT as of 23 July, according to Mysteel’s assessment.
Many domestic rebar traders have been lowering their offering prices to sell off rebar stocks in hand ahead of the implementation of the newly stipulated standards for hot-rolled (HR) rebar on 25 September, as reported.
The weaker futures could pass downward pressures to spot coke market in the days ahead, a market watcher predicted, adding that some traders may slow their speculative activities to avert losses. Mysteel learned that the expectations that mills may demand a new cut on coke selling prices are growing among some participants.
Sources shared that many steel mills have apparently showed less urgency in requiring delivery of more coke cargoes from their suppliers yesterday, suggesting that they may have basically restocked enough feed materials and could slow down purchases in the short run.
Besides, prices of more coking coal grades revised down yesterday, meaning that the cost support for domestic coke prices continued weakening, Mysteel noted.
Operations stayed relatively stable at most coke plants due to their lingered profits. As of 23 July, coke makers in North China’s Shanxi province reported a yuan 18/t profit for selling wet-quenching quasi-first-grade met coke, rising by yuan 5/t on day. In parallel, their profit for selling dry-quenching same-grade coke rose by yuan 6/t to yuan 100/t, Mysteel’s survey showed.
At Rizhao and Qingdao ports in East China’s Shandong province, coke stocks totalled 1.49 million tonnes (mnt) as of 23 July, climbing by 10,000 tonnes (t) on week, Mysteel’s tracking data showed.
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.
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