Met Coke: Chinese market buoyed by plant idling in Tangshan

The Chinese metallurgical coke export market has witnessed a turnaround in sentiment as several coke plants in the country's Shandong province proposed to raise coke prices by Yuan 50-100/MT (USD 7.12- 14.24/MT).

The bullish sentiments were also supported by the news of the closure of coke plants in Tangshan, which will be affecting 42% of Tangshan's total coking capacity.

A total of eleven coke plants in Tangshan, North China's Hebei province, have been recently ordered by the provincial government's department of ecology and environment to cease business as punishment for not having obtained valid environmental permits, according to a leading Chinese market intelligence firm, Mysteel.

The eleven coke plants and another three (already idled businesses) had all been found not to possess valid environmental permits, even though all had been commissioned and were operating. Last year, Tangshan's environmental authorities had granted them one-year interim pollutant emission permits valid until March-September this year, ordering the coke makers to obtain all necessary environmental permits in the meantime.

However, despite failing to receive all the required permits the eleven coke plants were still in business after September, which seriously contravenes the country's environmental laws. Tangshan city government was requested to initiate the process of formally winding up the coke plants' business, with the notification warning that any non-performance of this order by the local government or relevant authorities would be reported to the provincial discipline and supervision committees.

The eleven coke plants comprise both independent merchant coke plants and captive coke operations owned by Tangshan steel mills.

Tangshan is not only China's largest steelmaking city but is also the country's top coke-producing hub, with about 34.5 million tonnes of annual coking capacity owned by local steel plants and independent coke makers.

China's coke futures market reacted decisively to the news on Monday. By 11:30 am Beijing time, the price of the most-traded January coke futures contract on the Dalian Commodity Exchange ended the morning session at Yuan 1,885.5/MT USD 267.8/MT), a remarkable 4.2% or Yuan 75.5/MT higher from last Friday's settlement price.

PRICE ASSESSMENTS

Chinese met coke export prices for the 64% CSR and the 62% CSR grades are currently assessed at around USD 281.00/MT and USD 268.00/MT FOB China respectively.

Indian met coke import prices for the 64% CSR and the 62% CSR grades amount to USD 273.00/MT and USD 252.00/MT respectively on CNF India basis.

Currently, India's domestically produced met coke prices for the blast furnace grade are hovering at around INR 24,000/MT (east coast) and INR 23,750/MT (west coast).