Chinese coke prices up again on restricted supply
Source: Mysteel
Jun 08, 2018 11:27
The strong growth trend in China’s coke market shows no signs of cooling down as domestic coke producers are planning to lift offer prices again after noting that supplies nationwide have declined, market sources said on Thursday.
For example, Risun Group, a major coke producer in North China’s Hebei province, was heard to be planning to raise offer prices by Yuan 100/tonne ($15.6/t) from June 8, according to a Hebei-based steel mill source.
The latest price hike will buoy Risun’s offer price for coke (12.5% ash and 0.65% sulfur) higher to Yuan 2,100/t including the 16% VAT, representing an accumulated increase of Yuan 450/t since April 23.
Coke producers in North China’s Shanxi province and in East China’s Shandong, Jiangsu and Jiangxi provinces are also mulling similar price hikes, Mysteel understands from the market.
“Supply is largely restricted as the operation of coking plants in many places – such as in (North China’s) Inner Mongolia (Autonomous Region) and (East China’s) Shandong province – is being controlled in response to environmental checks and to the convening of the Shanghai Cooperation Organization Summit this weekend in Qingdao,” a Shanghai-based coke analyst said.
Coking plants in Shandong province, especially in the cities of Weifang, Rizhao and Linyi, were ordered by local authorities to cut production by 30%-50% for 15-25 days since late May, in order to control air pollution during the SCO Summit to be held over June 9-10 in Qingdao city, Shandong province.
Local steelmakers’ production activity was also restricted, but the curb was imposed more on sintering rather than blast furnace operations, according to market watchers.
At the same time, the ongoing environmental inspections across China resulted in the suspension of production or at least restrictions on output at many coke enterprises. Those in Shaanxi province, for example, curbed their production by 20%-30% in response to these environmental checks, Mysteel learnt.
Restrictive measures for environmental protection were not only limited to an enterprise’s production. Trucks hauling coke were frequently checked on the road and many were fined due to overloading, the above Hebei-based steel mill official told Mysteel.
Due to the tightening of coke supplies, coke inventories at Chinese steelmakers remain very low, which forced Chinese steel producers to accept higher coke prices, according to the mill.
As of June 1, coke stocks at 110 steel mills Mysteel regularly surveys totaled just 4.15 million tonnes, the lowest since December 2017.
Written by Olivia Zhang, zhangwd@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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