- Second round of nationwide coke price cuts led by steel mills
- Weak steel demand keeps outlook bearish, more cuts likely
Mysteel Global: A new round of price cuts – the second bout since late November – took effect across the Chinese metallurgical coke market on December 12. Dampened by softer prices, market sentiment remained largely subdued, with some players concerned about more price declines in the near term.
Last Friday, Mysteel assessed China’s quasi-first-grade met coke prices, for wet-quenching and dry-quenching types respectively, at Yuan 1,485.7/tonne ($210.7/t) and Yuan 1,620.7/t including the 13% VAT, down Yuan 45.5/t and Yuan 53.8/t from the previous session.
Two leading steelmakers in East China’s Shandong and North China’s Hebei cut Yuan 50-55/t off their purchasing prices for all met coke products in their tenders issued last Friday. This had encouraged smaller mills to follow suit and pushed the price cut effective nationwide, according to market sources.
After the adjustment, the Shandong-based steelmaker is now paying Yuan 1,495/t and Yuan 1,750/t on a DDP basis including VAT, for wet- and dry-quenching quasi-first-grade stamp-charged met coke (ash 13%, sulfur 0.75%, CSR 60%).
The other steelmaking giant in Hebei also reduced its purchasing prices for wet- and dry-quenching first-grade top-charged coke (ash 12.5%, sulfur 0.7%, CSR 65%) by the same extent to Yuan 1,660/t and Yuan 2,030/t DDP with VAT, market sources noted.
Following the softer met coke prices, sentiment among market players also weakened in tandem. This was reflected in the downtrend in futures prices, with the most-traded met coke contract for next January delivery on the Dalian Commodity Exchange ending last Friday’s daytime trading session at Yuan 1,475/t, down 3.1% from Thursday’s settlement price.
Meanwhile, as the steel market was still plagued by slack steel trades, some participants were concerned that steelmakers may continue to push for reductions in raw material prices in the days ahead, sources reported.
As such, the outlook for met coke market remained largely negative, with some predicting another two or three rounds of price cuts ahead, according to sources.
After the price cut last Friday, prevailing offers for dry-quenching quasi-first-grade met coke in North China’s Shanxi province ranged between Yuan 1,505-1,520/t, and those for the same grade in Shandong were within Yuan 1,695-1,765/t, both down by Yuan 55/t from the previous day, on an EXW basis and including VAT, according to Mysteel’s tracking.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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