China: Met coke stocks at plants decrease to 5.5-month low

Total stocks of merchant coke at the 230 Chinese independent coke plants, which Mysteel monitors weekly, decreased for a fifth week by another 78,800 tonnes or 7.8% on week to a 5.5-month low of 936,600 tonnes as of June 18. Behind the decline was the buoyant demand for coke from domestic steel mills continuing to ramp up steel production.

During the same survey period, the capacity utilisation rate of the same sampled coke makers remained stable, edging up by just 0.26 percentage point on week to 74.65%. Accordingly, daily output at these coke plants nudged up as well, rising by 2,300 tonnes/day on week to 663,200 t/d as of June 18.

In the meantime, steel mills’ buying interest for coke remained active, with the result that total stocks of coke at the 110 domestic steel plants which Mysteel monitors rebounded by 42,700 tonnes on week to 4.64 million tonnes. The stocks could sustain the mills’ operations for 14.27 days on average, or 0.07 day shorter than the prior week, according to Mysteel’s data tabled on June 19.

Thanks to the further declines in finished steel stocks and the reasonable steel margins the domestic mills are earning, steelmakers cranked up output further over June 12-18. As of June 18, blast furnace capacity utilisation among the 247 steel mills Mysteel checks had grown for a fourteenth consecutive week, climbing by another 0.31 percentage point to 92.66%, according to Mysteel’s weekly survey.

The steady decrease in coke inventories and strong demand from steel mills gave the coke makers confidence to keep on pushing up their offers. From the beginning of this week, many coke plants in North and East China raised their offers for merchant coke by Yuan 50/tonne ($7.1/t), as reported. Should the steel mills buckle again and agree to the coke makers’ demands, the price hike will be the sixth successful round the makers have enjoyed since the end of April, Mysteel Global noted.

As of June 18, Mysteel’s composite price for Chinese domestic coke had risen by another Yuan 43.6/t on week to a near four-month high of Yuan 1,870.2/t including the 13% VAT, Mysteel’s data shows.

Note: This article has been published under an article exchange agreement between CoalMint and Mysteel — a China-centric insight and global metal markets intelligence providing company.