China’s domestic coking coal and metallurgical coke prices stay supported at increased levels with strong steel-related industrial activity amid weaker environmental controls, as high quality Australian coking coal imports were reportedly suspended in November.
CoalMint assessed the latest price for met coke with 12.5% ash in North China at CNY 2,240/t ($349.40/t), up CNY 30/t ($5.53/t) on the week.
Meanwhile, major cokeries in Northern China have accepted the eighth round of price hikes by CNY 50/t, but steelmakers are yet to accept the 8th round of price uptick proposal. Since early August, Chinese domestic met coke prices have been raised by a total of CNY 400/t.
CNF China prices for met coke have increased by approximately $5/t across major origins and are currently assessed at $315/t (Japan), $310/t (Poland), $300/t (South Korea) and $300/t (Russia).
A buy tender was issued in this week by a Northeast Asian steelmaker seeking approximately 80,000-100,000 t of met coke with first-quarter 2021 laycan. Market participants anticipate trades taking place between $365-$380/t FOB China for Chinese 62% CSR coke given the tight supply conditions.
Chinese domestic met coke prices continue uptrend on supply shortage
The Chinese domestic met coke market continued to see upward momentum with the eighth round of uptick by CNY 50/t proposed by major coke producers in Hebei on Nov 30. Demand for coke in the domestic market had remained healthy amid a healthy downstream steel demand, but a squeeze in domestic supply of coke had resulted in the upward movement of coke prices since early-August.
China’s coke inventory has been on the decline since past several weeks in a row, which hs exacerbated the supply-demand imbalance and warmed up buoyant outlook.
Met coke supplies have tightened following the widespread implementation of governmental policies to phase out outdated coking capacity in China’s Shanxi and Henan provinces, giving rise to coking plants’ willingness to push up prices.
The supply tightness is predicted to last until at least the next quarter, amid ongoing replacement and reduction of coke capacity in China. Supported levels of steel production are expected to continue boosting coke demand and prices thereof.
Globally, coke prices are also on the rise as steelmakers having ramped up steel production amid healthy downstream demand require more coke for own consumption, allocating lesser supplies for seaborne spot sales.
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By Aditya Sinha
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