Citing the current tightness in supplies of metallurgical coke, merchant coking plants across East China’s Shandong province have notified their buyers of their proposal to raise met coke prices by another $7.1/tonne (Yuan 50/t) effective yesterday 17 Jun’20. However, opinion among market participants is divided as to whether the latest adjustment will be realised.
“Coke supply in Shandong remains short, while the provincial curbs imposed on met coke output would keep on progressing even as demand has increased further recently”, commented an analyst based in Shanghai.
As of 11 Jun’20, the capacity utilisation rate of 230 Chinese independent coking plants was unchanged at 74.4% w-o-w, while capacity utilisation of blast furnaces operated by 247 Chinese steel mills was higher by another 0.5% w-o-w at 92.4%.
As of 16 Jun’20, the Chinese national composite met coke price had inclined by Yuan 41.7/t w-o-w to reach Yuan 1,865.6/t including the 13% VAT to hit a near four-month high.
Triggered by the higher met coke prices in Shandong, several coke makers in North China’s Shanxi have also announced plans to raise their offer prices by Yuan 50/t.
“Despite the tight met coke supplies, whether the steel mills will concede and pay the increase remains uncertain”, commented an analyst in Southeast China’s Fujian province, arguing that steelmakers are showing resistance because of the slide in finished steel prices.
In contrast to the higher met coke prices which prevailed during the past week, composite price for the HRB400 20mm dia rebar had dropped by Yuan 37/t w-o-w to reach Yuan 3,809/t including the 13% VAT as of 16 Jun’20. Long steel prices began softening from early June when South and East China entered the rainy reason, which impacted regional steel demand.
“Met coke prices have increased too fast over the past several weeks”, commented a Shanxi-based industrial source. “After the active replenishment over the past few weeks, steelmakers’ enthusiasm for met coke purchases has slightly diminished”, he observed.
As of 17 Jun’20, no agreement on the latest adjustment between steelmakers and coking plants had been reported yet.
Note: This article has been published under an article exchange agreement between CoalMint and Mysteel — a China-centric insight and global metal markets intelligence providing company.
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