CHINA COKE WRAP: Prices up further on mill demand, cokery restrictions

China’s domestic and export coke prices extended their upward momentum this month amid healthy demand from Chinese mills and continued restrictions on cokeries.

Metal Bulletin’s assessment of export prices for Chinese coke with 65% coke strength after reaction (CSR), 12.5% ash, 30-90mm, was $340-350 per tonne fob China for the week ended Tuesday May 29.

Although unchanged from the preceding week, the range is up $10 per tonne from a fortnight earlier, and $20 per tonne higher than the assessment of $320-330 per tonne fob for the week ended May 8.

While export deals were heard at around $320-330 per tonne fob earlier this month, subsequent higher prices due to domestic hikes have pushed most buyers and sellers to the sidelines.

“Chinese coke at $350 per tonne fob is more costly than domestic Indian materials,” a trader in India said.

North China’s Hesteel has raised its coke purchase prices for the fifth time in May, by 100 yuan per tonne from May 31. It has made increases totaling 400 yuan per tonne over the month and is now paying 2,270 yuan ($354) per tonne for materials with 65% CSR delivered to its facilities.

Many other steelmakers in the country have even accepted a sixth round of coke price rises, up by a total of 450-500 yuan per tonne over the past month.

This is based on the high utilization rate of blast furnaces amid handsome margins.

Member mills of the China Iron & Steel Association produced crude steel at an average rate of 2 million tonnes per day during the second 10 days of May, up 3% from 1.94 million tpd in early May, according to latest data from the industry body.

East China’s rebar prices stood at 3,920-3,970 yuan per tonne on May 31, up from 3,790-3,830 yuan per tonne a week earlier, though lower than a two-month high of 4,060-4,100 yuan per tonne at the beginning of May.

Market participants also attributed the hikes to lower production rates and limited inventories at cokeries, due to persistent pressure from local authorities to contain pollution.

While a source at a cokery in the top coke-making province of Shanxi told Metal Bulletin its operations have returned to normal from a 30% cut earlier this month, production stoppages in Xuzhou city have continued and are restricting supply in east China.

In north China’s Inner Mongolia autonomous region, pollution inspections are heard being carried out in cokeries and coalmines, leading to tightness in coal and coke supply.

Qingdao city in the eastern Shandong province is hosting the 18th summit of the Shanghai Cooperation Organization on June 9-10. A few coke producers nearby have been asked to trim production by 30% for better air quality during the event.

The impact, however, is relatively limited, as the coke capacities affected add up to only about 5 million tpy, a futures company researcher said.

China produced 36.72 million tonnes of coke in April, down 3.6% on the year, according to the National Bureau of Statistics. In the first four months, output totaled 139.35 million tonnes, down 3.5% from year-earlier levels.

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