China’s steelmakers lower coke procurement prices again
For example, North China’s Shanxi Jianlong Industry said it was lowering its coke buying price by Yuan 100/t for all types of merchant coke with effect from March 21, Mysteel learned. The Shanxi province-based mill had lowered its buying price by Yuan 100/t a week earlier.
Rizhao Steel Holding Group in East China’s Shandong also told merchant coke makers they would be getting Yuan 100/t less for all types of coke the mill intends to buy from them effective from Thursday. After the adjustment, Rizhao Steel’s price for dry-quenching coke with 13% or lower ash and 0.7% or lower sulphur declined to Yuan 1,920/t on delivery to its steelworks and including the 16% VAT. The Shandong mill’s pricing strategy is often considered an indicator of the province’s merchant coke market, Mysteel notes.
“The coke stocks at our works are even higher than last week because of the steady arrival of large volumes at our plant, and yet we still can’t see much sign of finished steel prices growing markedly in the near future,” an official from a Hebei-based steel plant said, admitting that his plant also lowered its coke procurement price this week.
As of March 14, coke stocks at the 110 steel plants across China monitored regularly by Mysteel reached a six-week high at 4.6 million tonnes, enough to last the mills for 15.39 days, also a six-week high, according to Mysteel’s survey last Friday.
"In fact, after the Yuan 100/t drop in coke prices last week, major market participants still anticipate that prices will decline further,” a coke analyst in Shanghai said. “As a result, both coke producers and traders have scrambled to deliver their goods to steel plants to secure as much margin as they could."
As of Thursday, some coke suppliers remained reluctant to cooperate with their mill customers, the analyst said, but added that those coke makers won’t be able to sustain their resistance for long as recently, more and more of their counterparts have buckled under the mills’ pressure and agreed to lower prices.
As of March 21, the price of merchant coke with 13% ash and 0.7% sulphur dropped Yuan 100/t on day to Yuan 1,900/t on delivery to steel plants in Tangshan in North China’s Hebei, taking the accumulated decline over the fortnight to Yuan 200/t, according to Mysteel’s assessment.
Written by Sean Xie, xiepy@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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