- Pollution control measures impact production
- Coke inventories at surveyed units rise over 5% w-o-w
Mysteel Global: Metallurgical coke production in China’s major producing hubs retreated slightly this week, ending two consecutive weeks of growth. The decline was mainly attributed to the intensified environmental protection measures and growing caution among producers amid a negative outlook, according to survey respondents.
For example, the 230 independent coke producers that Mysteel surveys nationwide produced 503,300 tonnes/day (t/d) of met coke averagely during December 4-10, sliding 1% from the previous week, according to Mysteel’s latest data.
Contributing to this output drop was mainly the heightened environmental pressure, since some coke plants in North China’s Shanxi and Hebei, Central China’s Henan, and Northwest China’s Shaanxi, had reduced their production by 20-50% earlier this week, as demanded by local authorities to control air pollution, as reported.
Meanwhile, some surveyed producers also scaled back their operations initiatively to avoid stock accumulations, after observing the slackening demand from steelmakers in tandem with their reduced operations at blast furnaces, the respondents added.
According to Mysteel’s survey of 247 blast-furnace mills across the country, their average output of hot metal had dropped by another 1.3% on week to 2.29 mnt/d over December 5-11, extending the downtrend for four consecutive weeks.
Despite lower production, the combined coke inventories at the surveyed coke plants still jumped by a sizable 5.4% from the previous week to 501,100 t as of December 11, according to Mysteel’s tracking. This marked its highest level since late July, also indicating the mounting selling pressures on coke plants.
As fundamentals of the coke market continued weakening, coke producers also lost bargaining power in price negotiations with steelmakers.
Leveraging the situation, domestic steel mills recently initiated a new RMB 50-55/t ($7-7.7/t) cut – the second bout since late November – in their purchasing prices for all met coke products, with the cut having taken effect on December 12 after two leading mills in Hebei and East China’s Shandong followed suit, according to market sources.
By December 12, Mysteel assessed China’s quasi-first-grade met coke prices, for wet-quenching and dry-quenching types respectively, at RMB 1,485.7/t and RMB 1,620.7/t including the 13% VAT, down RMB 46.6/t and RMB 53.8/t on week.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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