Met coke prices in China seem to have stabilised towards end-Jan’22 after three rounds of price hikes totalling RMB 500/t in Jan, while end-users rejected the fourth round of hike proposed by the sellers.
The first three rounds of hikes were accepted by end-users because of the high demand for coke from steel units, limited inventory and delayed shipments of seaborne coking coal from the USA, Canada and Mongolia.
But there was resistance to the fourth round of hike because of the fulfilment of restocking demand ahead of the Chinese New Year holidays and also due to the adverse impact on profit margins because of high raw material costs.
Feb outlook stable
After the Spring Festival holidays in Feb steel mills in China are expected to resume operations and demand for coke would go up once again. The resumption in demand after the holidays is expected to be limited because of informal directives pertaining to limitations on steel production during the Winter Olympic games. Production curbs, especially in Northern China, will continue till 15 March.
Supply is also expected to be constrained as a few coke producing units in the key province of Shanxi have been served an oral notice to limit production from 29 Jan-20 Feb and from 1-15 March.
Thus, China’s coke market is likely to remain stable with limited room for a price hike in Feb.
China’s coke production- 2021
China’s total coke production stood at 464.46 million tons (mnt) in CY’21, a year-on-year decrease of 4.03 mnt, according to data from the National Bureau of Statistics (NBS).
Exports in 2021
China’s total met coke exports stood at 6.44 mnt in CY’21, a year-on-year increase of 84.3%, with the average export price for the year standing at $519/t. The cumulative export value of coke in CY’21 was $2,357.839 million, a y-o-y increase of 205%.
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