China's met coke market remains cautious ahead of key political session

SXCoal: China's metallurgical coke market is currently in a cautious "wait-and-see" mode, as participants anticipate possible government economic stimulus during a key political meeting this week. Coking plants are holding prices steady despite a weaker supply-demand balance and reduced cost pressures.

On November 5, prices for Quasi Grade I Met coke in Luliang and Tangshan remained stable at 1,660 yuan/t (ex-plant with VAT) and 1,860 yuan/t (DDP with VAT), respectively. Rizhao's price also held at 1,780 yuan/t (FOB with VAT).

Lower feed coal prices have helped coking plants maintain decent profit margins, encouraging them to continue production at high capacity. Even with a slight drop in molten iron output, steel mills kept their demand for coke high, driven by ongoing profitability in their operations.

Some traders returned to the market after a dip in steel prices, boosting steel transaction volumes. Construction steel sales reached around 154,200 tonnes, a notable 55.14% rise compared to last Friday.

Coke producers reported smooth sales and low stock levels. One Shanxi-based producer reduced dry-quenching coke stocks from 7,000 to 3,000 tonnes while operating at 80% capacity. In Hebei, another producer ran at 95% capacity, confirming strong demand from steel mills.

However, some steelmakers have built sufficient coke inventories, leading to a reduction in purchases. This has caused some stock buildup at coking plants in central and western China.

As of November 4, coke inventories at surveyed steel mills rose to 924,900 tonnes, a 0.8% increase from the previous week. Prices remain stable, though some expect further declines due to ongoing negotiations between coke and steel producers and forecasts of lower molten iron output.

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