Sentiment strengthens in China’s met coke market

• Sentiment improves as coking coal stabilises
• Port and futures prices rise; mills boost hot metal output

Mysteel Global: Sentiment in the Chinese metallurgical coke market improved on June 27, with the stabilizing domestic coking coal prices and the high output of hot metal lending support to the market, Mysteel Global learned.

Last Friday, the national composite met coke price assessed by Mysteel remained unchanged from the previous session at Yuan 1,126.2/tonne ($157.2/t), including the 13% VAT.

Prices of coking coal stabilized as operations among some coal mines in North China’s Shanxi and Inner Mongolia had been disrupted recently due to frequent safety checks and tighter environmental regulations, reducing overall coal availability in the market, as reported.

With coking coal prices stabilizing, coke producers regained firm cost support, which they believed could help them eliminate future downside pressures, a Shanxi-based analyst said.

Meanwhile, coke makers were also encouraged by the high output of hot metal among domestic blast furnace mills, since their brisk production could translate to solid demand for raw materials, the analyst added.

As the bearishness of the market was easing in recent days, more participants started to hold a positive outlook for the future. Several sources expected that some coke producers may move to lift their selling prices of met coke in July.

Amid the brightening sentiment, met coke prices in the derivatives market ticked up for the third consecutive session. The most-traded met coke contract for September delivery on the Dalian Commodity logged a 2.5% gain by the end of the daytime trading session last Friday, settling at Yuan 1,421.5/t.

Encouraged by the upbeat futures market, met coke traders in the portside market lifted their quotations on the same day. At Qingdao port in East China’s Shandong province, Mysteel’s assessment of first-grade met coke (ash 12.5%, sulfur 0.65%, CSR 65%, MT 7%) price rose Yuan 30/t on day to Yuan 1,270/t, while quasi-first-grade met coke (ash 13%, sulfur 0.7%, CSR 60%, MT 7%) was also assessed higher by Yuan 30/t at Yuan 1,170/t, both on an ex-stock basis with VAT.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.