WEEKLY: China’s coke makers trim output on coal supply

On Thursday, average coking capacity utilization rate among the 230 coking plants declined by another 2.6 percentage points from February 2 to 63.2%, and their total coking coal inventories decreased 1.2 million tonnes or 8.9% from last Sunday to 12.7 million tonnes, which will be sufficient for their 16.9 days of consumption on average, or 0.9 day short of that as of February 6, according to Mysteel’s data showed.

Many China’s coking coal washers and miners have postponed the resumption of their operations by at least one week to no earlier than February 9 because of the ongoing battle against the Novel Coronavirus. Besides, coking coal delivery via heavy-duty trucks to the coking plants has been subdued under the present circumstances, as reported, though coking coal can still be moved by rail, Mysteel understood when surveying the market.

Despite lower coke output, coke stocks at the 230 coking plants kept growing by another 183,500 tonnes or 10.5% from February 2 to 1.9 million tonnes on February 6, as they were unable to deliver much coke to Chinese steel mills, and coke stocks at the 110 steel mills under Mysteel’s other weekly survey, thus, dipped by 63,500 tonnes or 1.3% from February 2 to 4.6 million tonnes as of February 6.

The existing stocks could support the 110 steel mills for 15.4 days of consumption on average at the present consumption rate, or 0.3 day longer than last Sunday, as steel mills have been cutting down on their iron and steel production amid the lull in the domestic steel demand.

The weak fundamentals in China’s coke market including demand and supply saw Mysteel’s composite coke price remain at Yuan 1,878.3/tonnes ($269.2/t) including the 13% VAT, or the same as on January 22 before the Chinese New Year break, according to Mysteel’s data.

Written by Sean Xie, xiepy@mysteel.com

Edited by Hongmei Li, li.hongmei@mysteel.com