As of 23 May, China’s national composite coke price under Mysteel’s assessment had dropped by yuan 92.5/t on week to reach yuan 2,006.9/t including VAT, according to the database.
Mysteel’s parallel survey conducted among a sample of 30 merchant coke producers nationwide showed that as of 23 May, these coke firms were making an average yuan 34 profit on each tonne of met coke they sold, a clear decrease of yuan 68/t from the previous week.
The coke-price pullback also dampened the production enthusiasm of some coke producers this week. The total volume of metallurgical coke produced by the 230 Chinese independent coking plants contributing to Mysteel’s survey only increased by a small 1,600 t/day during 16-22 May to reach 533,500 t/d, the latest survey results show. This growth was slower compared to the 5,500 t/d increase observed in the previous survey week.
The slower growth in coke output was also symptomatic of waning buying interest for coke among Chinese steelmakers, as most mills chose only to buy enough coke to meet their production needs rather than build up inventories. Also, some tried to keep materials stocks at reasonable levels to safeguard the profits they’re making now from this week’s rises in finished steel prices.
Consequently, over 17 -23 May, stocks of met coke held by the sampled 230 coke producers rose by 66,000 t or 16.8% on week to reach 462,100 t, according to the latest survey.
Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.