Chinese coke industry faces split opinion on upcoming price hike

• Coke producers eye RMB 50-55/t hike
  
  
• Met coke output down about 2% y-o-y in May
  
  

Chinese coke producers are pushing for price increases effective 21 Jun'24, attributing the move to rising feed coal costs, regional supply constraints, and heightened interest from some steel mills. Despite their initiative, opinions within the market are sharply divided.

If accepted, prices for wet- and dry-quenching coke would rise by RMB 50/t ($7) and RMB 55/t ($7.5) respectively.

Some producers curtailed production due to losses incurred after successive price cuts, exacerbated by recent hikes in coking coal prices. Meanwhile, others noted low coke inventories at coking plants despite ongoing smooth dispatches.

During a meeting on 20 June, coke producers from major regions including Shanxi, Hebei, and Inner Mongolia agreed to raise coke prices by RMB 50-55/t. They also pledged to cease supplies to steel mills refusing the proposed price hikes, citing losses ranging from RMB 50-300/t due to elevated coke-making expenses.

Meanwhile, steel mills maintaining high capacity utilization continued to drive demand for coke. Some mills with low inventory levels were eager to restock promptly.

China's total coke output decreased by 1.5% on year to about 40.96 million tonnes (mnt) in May'24, according to new data released by China's National Bureau of Statistics (NBS). The country's coke output in the first five months fell by 1.9% on year to total 199.47 mnt.