Beginning this week, leading producers of metallurgical coke in North and East China have decided to launch another campaign to push up selling prices by CNY 50/tonne ($7.4/t), citing rising coal price and steel mills' robust appetite for met coke.
"The coking costs have mounted recently, due to higher prices of most coal products in the market", a letter from a coking company in North China's Shanxi dated September 15 reads. "Due to the concentrated orders from end-users, coke stocks at the coking plant have stayed low and are insufficient to fully satisfy demand", it added.
From September 17, the company will raise selling prices for all its coke products by CNY 50/t, according to the letter, which warned that an additional CNY 50/t hike will be imposed on new customers.
"Even though the steel margin is thin, I think domestic steel mills will surrender", commented a Shanghai-based analyst. "Steel mills have to accumulate sufficient coke stocks to maintain steady operations during the National Day holidays (over October 1-8), but at present, their stocks at hand are low", he explained.
Total coke stocks at the 110 Chinese steel plants, under Mysteel's weekly survey, slid for the sixth week to reach 4.6 million tonnes as of September 10, lower by 1% week-on-week and hitting a 6.5-month low. The stocks could sustain their operations for just 14 days - a 14.5-month low.
Coke stocks at the 230 Chinese independent coking plants, sampled by Mysteel, are at a low level too, as the volume was only 823,300 t as of September 10.
"Even with the coke makers' new requests to adjust coke prices, steelmakers' buying enthusiasm remains strong", observed an industry source in Shanxi. "Some medium-sized steel mills have accepted the higher prices to secure coke deliveries to their works", he added.
However, as of September 16, no leading steel plants in North and East China accepting the latest adjustment had been heard of.
As of September 15, Mysteel's national composite coke price had edged up by CNY 2.1/t on week to CNY 1,884.2/t including the 13% VAT, a two-month high.
Note: This news article is published under a data exchange agreement between CoalMint and Mysteel - a China-centric insight and global metal markets intelligence providing company.
By Aditya Sinha