China: Mills accept 2nd round of met coke price hikes as demand strengthens

Sxcoal: Some Chinese steel mills have accepted the second round of met coke price hikes proposed by producers earlier this week, driven by increased demand for restocking ahead of the National Day holidays and rising steel prices. Positive economic policies have improved steel mill profitability, leading to higher prices for both futures and spot steel products. This has prompted many mills to restart their blast furnaces and quickly replenish coke stocks before the holiday.

Major mills in Hebei, Shandong, and Tianjin have agreed to price increases of RMB 50/tonne (t) for wet-quenching coke and RMB 55/t for dry-quenching coke, effective 26 September 2024. This has brought the total price hike by late September to RMB 100-110/t.

Prices of rebars and HRCs rose against last week. Some speculative traders, anticipating potential profits, entered the market and diverted coke supplies to steel mills. Steelmakers, facing rapid destocking, were eager to secure coke supplies, even at a premium.

Coking plants reported smooth sales and low stock levels, with inventories at 100 plants falling to 467,100 t as of 25 September, down 12.3% from the previous week. Despite the price hike, most plants were still operating at break-even levels, with some even facing losses, limiting significant production increases and maintaining tight supply.

The successful implementation of the second price increase has encouraged some coke companies to consider a third hike before the holiday, which has also boosted the coking coal market. Strong demand from coke producers has kept coal prices firm.