Chinese domestic metallurgical coke prices have reached a two-year high amid tight supply; therefore attracting higher imports by end-users in China.
Meanwhile, China-delivered coking coal prices have also surpassed multiyear highs on limited availability, following the country’s indefinite ban on imports from Australia since mid-October last year.
CoalMint assessed the latest price for domestic met coke with 12.5% ash in North China at CNY 2,440/t ($374/t), up CNY 80/t ($12.16/t) on the week, with more upticks expected.
Notably, some coking plants in provinces such as Shanxi, Hebei, Liaoning and Shandong have started to hike coke price by CNY 100/t from today onward.
CNF China prices for met coke from major origins have increased by approximately $10/t week-on-week and are currently assessed at $340/t (Japan), $335/t (Poland), $325/t (South Korea) and $325/t (Russia).
Positive steel margins support demand for high-priced coke—
The relative tight supply of coke coupled with the ongoing de-capacity measures have consistently jostled up coke prices over the latter half of the last year.
Even though higher prices for both metallurgical coke and coking coal have raised steel production cost in China, steelmakers are still making margins, thus ruling out possible production cut anytime soon.
Sources said they expected restocking demand to continue as high coke prices were supported by its continuing scarcity and positive steel margins.
As smaller coke ovens were ordered to be shut down in Shanxi, coke supply will only get tighter, according to end-users.
With regard to the Chinese ban on coal imports from Australia, some industry participants believe that it may be lifted by mid-2021 with China-based steel mills forced to resume purchases due to their reliance on high-quality Australian grades.
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By Aditya Sinha
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