The met coke prices in China have mellowed down as the demand for steel has touched all time low in China.
On the downstream side, steel mills in China are struggling with costs and are operating below the break-even due to fast decline in prices amid the epidemic situation in the country. In Hebei, Shanxi, Shandong Jiangsu and Yunnan provinces, the steel mills demand to lower the met coke prices by RMB 50/MT has already been met from this week.
According to the industry experts, the weak steel demand in the country has forced major steel suppliers to continuously cut down their prices over the past several days resulting which the margins that some steelmakers are earning on their finished steel has turned even lower than the margins the merchant coke makers are generating on their coke production.
On the upstream side side, the coal supply in the country has increased as the coke producing units that had stalled their production amid virus outbreak have gradually resumed operations. The coking plants are actively seeking for sales while stock stays at reasonable level after demand from mills to lower coke prices have been met. Due to the reopening of transport routes, the volume of coke arriving at steel plants has increased, while their consumption remains unchanged. On port side, the prices in main coke producing area have turned weak and traders are holding pessimistic outlook.
Mysteel surveys shows that the capacity utilization rate of the 230 Chinese independent coking plants towards the end of Feb month, regularly reversed up by 2.2 percentage points from its more-than-two-year low to reach 62.3% due to the uptick in coking coal production that had also been impacted by the virus. However, the blast furnace capacity utilization rate of the 247 steel mills regularly dropped further to refresh a four-month low in February last week to reach 73.9%, indicating their weaker appetite for raw materials.
Price Assessments
Chinese metallurgical coke export prices for the 64% CSR and 62% CSR grades are assessed at around USD 290/MT and USD 283/MT, FoB basis. Indian metallurgical coke export prices for the 64% CSR and 62% CSR grades are assessed at around USD 302/MT and USD 295/MT, CNF basis.
Currently, India’s domestically produced metallurgical coke prices for the blast furnace grade are hovering at around INR 23,750/MT and INR 24,000/MT in the country’s west and east coast respectively.
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