Met Coke: China Coking Plants Out Of Losses on Lower Coal Prices

In China, a number of metallurgical coke makers had been able to get rid of loss-making by mid-April, as domestic coke prices were essentially unchanged over the past two weeks, while coking coal prices kept sliding by around Yuan 20/tonne (US$ 2.8/tonne) in the meantime, according to Mysteel -- a China-centric insight and global metal markets intelligence providing company.

On April 17, China's national composite price for the domestic coking coal declined further by Yuan 17.8/t fortnightly to hit a new two-year low of Yuan 1,083.9/t, while the composite coke price, in comparison, dipped by Yuan 3.8/t over the past two weeks at its 33-month low of Yuan 1,659.2/t, both including the VAT, according to Mysteel's data.

The average coking margin of the 30 Chinese coking plants under Mysteel's weekly survey, as a result, returned to a positive Yuan 21.9/tonne ($3.1/t) on April 16 as against the negative Yuan 13.3/t on April 2, according to Mysteel's latest report on April 17.

"Some prime coal prices have been declining since early March, down a total of Yuan 100/t in total by now", a Shanghai-based analyst added, noting that prices of some by-products in coking such as coal tar and crude benzol have also contributed to margins for coking plans.

However, the time is not ripe yet for China's coking plants to attempt higher margins, as some leading coking plants in North China failed in raising their merchant coke price by Yuan 50/t last week, as Chinese steel mills are yet ready to pay more for domestically-produced coke yet, according to a Beijing-based analyst.

"Higher blast furnace capacity utilization has spurred up steel scrap and iron ore price, and soon it may be the turn for coke as the demand from the steel mills should be rising while supplies may ease with the ongoing coking de-capacity in Shandong", she shared her optimism.

As of April 16, the blast furnace capacity utilization rate among the 247 Chinese steel mills returned to the normal level of 80%, or around the same in late January before the Chinese New Year (CNY) holiday, while the coking capacity utilization rate among the 230 Chinese coking plants rose by 0.7 percentage point on week to 71.4%, which was still one percentage point below that in late January, according to Mysteel's data.

Note: This article has been published under an article exchange agreement between CoalMint and Mysteel Global.

PRICE ASSESSMENTS

Chinese metallurgical coke export prices for the 64% CSR and the 62% CSR grades are assessed at around USD 270.00/MT and USD 252.00/MT FOB China respectively.

Indian metallurgical coke import prices for the 64% CSR and the 62% CSR grades amount to USD 281.00/MT and USD 264.00/MT respectively on CNF India basis.

Source: CoalMint Research