Chinese met coke producers initiate new price hikes

• Active pre-holiday demand, tight supply prompt hikes
  
  
• Higher coking coal costs, trucking rates support price rise
  
  

Mysteel Global: A new price adjustment window opened for China's metallurgical coke market on 24 April, with several major coke producers across the country proposing higher selling prices amid active pre-holiday demand and relatively tight supply of the steelmaking feedstock.

Mysteel's assessment of the national quasi-first-grade met coke prices, for dry and wet-quenching types, settled at RMB 1,623.6/tonne (t) ($237.5/t) and RMB 1,472.7/t, including the VAT, respectively, on Friday, both unchanged from the previous day.

Last Friday, several mainstream coke firms in North China's Shanxi, Hebei, and Inner Mongolia announced RMB 50-55/t hikes on their wet- and dry-quenching met coke cargoes, effective Monday, citing the higher costs elevated by rising coking coal prices and trucking rates.

While leading steelmakers have yet to respond as of Monday morning, market players expect they will accept the price increases, although the eventual implementation may be delayed from the original schedule. Some sources anticipate that the price uptick is likely to materialise before China's May Day holiday over 1-5 May.

The coke supply-demand landscape largely remains supportive. The pre-holiday restocking has continued driving smooth coke flows to steel mills, leading to lower stockpiles at coke plants, Mysteel Global notes.

In the downstream steel market, stock depletions of five major steel products have also gathered pace thanks to pre-holiday replenishments by end-users. The near-term scenario remains optimistic despite a potential slowdown of demand growth in the future, Mysteel's other survey indicated.

Meanwhile, many steel mills have enjoyed decent profit margins recently, which is anticipated to raise their expectations for steelmaking raw materials and push for a successful price increase for met coke.

On Friday, the prevailing offers for Lvliang quasi-first-grade met coke and first-grade met coke, both for dry-quenching type, ranged between RMB 1,575-1,590/t and RMB 1,685-1,695/t, respectively, exw with VAT, both unchanged d-o-d, Mysteel learnt.

The portside coke market moved sideways the same day, since traders tended to be cautious about tweaking prices amid a fluctuating futures market. Mysteel's assessment of the wet-quenching basis quasi-first-grade met coke (CSR 60%) and first-grade type (CSR 65%) on Friday remained flat d-o-d at RMB 1,530/t and RMB 1,630/t, respectively, ex-stock Rizhao port, East China's Shandong province, with VAT included.

At Rizhao and Qingdao ports, Shandong province, met coke inventories totalled 1.4 million tonnes (mnt) by Monday morning, lower by 2.2% from a week earlier, Mysteel's tracking data showed.

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