Shanxi steelworks cut coke price 1st time since late April
“The continuing rises in the major steelmaking raw materials prices have been imposing greater pressure on our steel production,” an official from a Shanxi-based steel mill admitted, confirming the mill’s decision to trim Yuan 50/t off the prices of all kinds of coke supplies effective July 6.
This has been a hard decision in contrast to the latest request by the domestic coking plants for another Yuan 50/t rise on metallurgical coke prices.
As of July 6, China’s average price for the HRB400 20mm dia rebar dropped Yuan 89/t on month to Yuan 3,757/t, while the domestic composite coke price rose Yuan 134.4/t on month to Yuan 1,917.6/t, both including the 13% VAT, according to Mysteel’s assessments.
Chart: Rebar Price (red, RHS) vs Coke Price (yellow, LHS)
Source: Mysteel, unit: Yuan/t
With the latest development, “domestic coke prices may have reached the peak and will head downward,” anticipated a Shanghai-based analyst, adding, “Steel mills’ new bookings for coke have shown clear signs of easing, indicating that they may have quite some inventories at the works.”
As of July 2, coke stocks at the 110 Chinese steel plants rose to an 11-week high of 4.9 million tonnes, or up 6% on week, which would be sufficient for their 14.8 days of consumption, a seven-week high or 0.8 day longer on week, according to Mysteel’s data.
At the same time, the blast furnace capacity utilization among the 247 steel mills under Mysteel’s survey appeared to have ebbed from the all-time high too, though the trend has yet to be definite, Mysteel Global noted.
Tangshan in North China’s Hebei province has announced pollution curtailment measures involving curbing local sintering operations and molten iron production, which may encourage local steel mills to follow those in Shanxi by asking for a Yuan 50/t cut in coke prices too, a local source shared.
“Domestic coke prices may not so easily dive yet, as even with less demand, the disruption of coke output especially in Shandong (in East China) will be supportive to the price in the long run,” he added.
So far, no Chinese coking plants had been reported accepting the lower bidding price from the Shanxi steel mills as of July 6, portside coke prices had shown signs of softening, as the top-grade met coke with 12.5% ash, 0.65% sulphur and 65% CSR dropped Yuan 30/t on week to Yuan 1,960/t ex-warehouse and including the 13% VAT on Monday.
Written by Sean Xie, xiepy@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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