DAILY: Chinese met coke market tends to remain weak

• Met coke market in January faces downward pressure
  
  
• Steel prices expected to stay low on weak demand, economic uncertainty
  
  

Mysteel Global: China's metallurgical coke prices were still stable on 31 December, with the national composite coke price under Mysteel's assessment keeping unchanged from Monday at Yuan 1,645.3/tonne ($225/t) including the 13% VAT. 1 January is New Year's holiday in China. Although coke prices are holding steady for now, the outlook for the coke market in January remains clouded with some downward pressure, Mysteel Global learned.

Several Chinese steel mills announced that they are about to conduct maintenance of their steelmaking equipment from January, meaning a reduction of about 24,300 tonnes/day in their combined daily hot metal output, Mysteel's latest survey showed. This has reinforced expectations that domestic hot metal production may remain on a downward trajectory this week.

Moreover, the country's steel market remains sluggish due to a seasonal slowdown, with steel prices expected to be trapped in a low-range oscillation. This will further weigh down steel mills' appetite for raw material procurement.

Mysteel's survey of 247 Chinese blast furnace (BF) steel mills found that daily hot metal production during 20-26 December averaged 2.28 million tonnes, down by 15,400 tonnes from the previous week.

Mysteel predicted that these mills hot metal output in January will dip to a low of around 2.25 million tonnes/day, signalling a continued decline in their appetite for coke.

As for coke makers, they were still operating stably with slight profits. Mysteel's survey conducted on coke producers in North China's Shanxi province showed that they could earn an average of Yuan 35/t on selling wet-quenching quasi-first-grade met coke on 31 December, up by Yuan 11/t from the previous working day, although they had accepted a Yuan 50-55/t cut in their coke selling prices just four days ago, as reported.

The slight improvement in coke firms' margins was mainly attributed to the ongoing downtrend in coking coal prices that helped lower their production costs, a market watcher said.

On 31 December, traders at Chinese ports reduced their coke offers by Yuan 10/t for domestic coastal users, hoping to strike some deals ahead of the country's one-day New Year holiday.

At Rizhao and Qingdao ports in East China's Shandong province, coke inventories totalled 1.21 million tonnes as of Thursday morning, up by 30,000 tonnes from the previous week, Mysteel's tracking data showed.

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