On Tuesday, a coke firm in North China’s Inner Mongolia notified its consumers that it planned to raise its coke selling prices by RMB 100-110/tonne ($13.8-15.2/t), citing deepening losses caused by higher coking coal costs, Mysteel Global learned from sources. However, no leading mills have made response to this request as of Wednesday morning, nor have other coke makers made a similar move.
Indeed, a gradual rise in coking coal prices recently has squeezed the profit margins of some coke firms. On 28 May, coke makers in North China’s Shanxi province, the top-coke producing hub in the country, reported a loss of RMB 84/t for selling wet-quenching quasi-first-grade met coke, and their loss on selling dry-quenching grade was RMB 14/t. The losses in the two coke grades were both deeper by RMB 19/t d-o-d, according to Mysteel’s survey.
Lower profitability prevented coke firms from ramping up their production, and they continued to keep their coke inventories at low levels, market sources said.
On the demand side, domestic steelmakers had moderate buying interests in met coke as they still churned out a large quantity of hot metal to enjoy healthy profits. Last Thursday, around 54% of the 247 Chinese mills under Mysteel’s tracking could make profits on selling their steel products, higher by some 2 percentage points from the previous week, Mysteel’s data showed.
Nonetheless, steel prices were in a downtrend recently, accompanied by sluggish transactions, sources revealed. “It seemed that market sentiment has gradually cooled after being briefly boosted by massive measures from the central government to revive the housing market,” a market watcher commented. Given the range-bound steel prices, the likelihood of a coke price hike in the short run was minimal, he added.
China’s national composite coke assessed by Mysteel was unchanged on day at RMB 2,004.6/t, including VAT, on Tuesday.
At Rizhao and Qingdao ports in East China’s Shandong province, coke stocks totalled 1.57 million tonnes as of 28 May, down by 10,000 t w-o-w, Mysteel’s tracking data show.
Note: This article has been published under an article exchange agreement between BigMint and MySteel.