China’s met coke market in stalemate even as output rises

China’s metallurgical coke firms still received no response from leading steelmakers on May 9 to their recent request for higher coke prices, but they were active in ramping up their production motivated by positive profit margins, Mysteel Global learned. On Thursday, China’s national composite coke price under Mysteel’s assessment was flat on day at Yuan 2,097.9/tonne ($290.5/t) including VAT.

Most domestic coke firms are now profitable after an array of successful price hikes in met coke. Mysteel’s survey among 30 merchant coke producers nationwide showed that as of May 9, they were earning Yuan 84/t on selling met coke in comparison to the Yuan 109/t loss a month earlier, though it was slightly lower than their average profit of Yuan 91/t reported on May 5.

The better profitability served as a boost to their production zest, as many coke makers were running at 80-90% of their designated capacity recently, with a few even producing at full capacity, market sources said.

The higher capacity utilization rate among coke makers brought about a spike in their production, Mysteel Global noted. The daily coke output of the 230 independent Chinese coke makers under Mystee’s regular monitoring averaged 526,400 tonnes/day during May 2-8, the highest volume since mid-January with an on-week leap of 6.7%, Mysteel’s data show.

While steelmakers have not given the nod to another Yuan 100-110/t rise in coke prices that coke makers demanded on Tuesday, they mostly continued to ramp up purchases of coke when coke supplies were on the rise, Mysteel learned from sources.

As of May 9, coke inventories held by the 247 Chinese steel producers tracked by Mysteel stood at 5.57 million tonnes, rising by 2.2% on week and giving an end to three straight weeks of declines, Mysteel’s latest survey showed.

“The prolonged resistance displayed by mills to the latest hike in coke prices has dimmed the likelihood of its success, a Shanghai-based analyst remarked.

At Rizhao and Qingdao ports in East China’s Shandong province, coke stocks totalled 1.7 million tonnes as of May 9, up by 25,000 tonnes on week, Mysteel’s tracking data show.