China: Another price cut may loom over met coke market
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Mysteel: Chinese metallurgical coke prices were stable on 6 August, but weakening cost support for coke prices, together with sluggish coke demand, led to the growing market expectations that domestic mills might push for another round of coke price cuts in the coming days, Mysteel Global learned from sources.
As of 6 August, China's national composite coke price under Mysteel's assessment remained unchanged on day at RMB 1,839.7/tonne ($257.8/t), including the 13% VAT.
Coke producers, particularly in North China's Shanxi province, could still manage to maintain profits due to the recent declines in coking coal prices. On Tuesday, coke makers in Shanxi generally earned RMB 17/t on average for selling wet-quenching quasi-first-grade met coke, up by RMB 4/t on day, Mysteel's survey showed.
However, lower coking coal prices also reduced the cost support for coke prices, which might provide steel mills, which are generally suffering deep losses, more justification to request another coke price cut, according to market watchers.
In terms of demand, sluggish purchases of coke from downstream mills also added more downside pressure on coke prices. Weak finished steel prices and low transaction volumes continued to hurt mills' margins and dented their appetite for feed materials, Mysteel Global learned.
On Tuesday, the national price of HRB400E 20mm dia rebar under Mysteel's assessment has slipped by RMB 14/t on day to RMB 3,380/t including the 13% VAT. Meanwhile, Mysteel's another regular tracking showed that the spot trading volume of construction steel, including rebar, wire rod, and bar-in-coil among 237 Chinese trading houses plummeted by 25% on day to 98,090 tonnes d-o-d on the same day.
China's portside coke market remained weak on Tuesday and traders chose to keep offers steady. At Rizhao and Qingdao ports in East China's Shandong province, coke stocks totalled 1.41 million tonnes as of 6 August, down by 80,000 tonnes w-o-w, Mysteel's tracking data showed.
This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.
