Mid-Week Recap: Chinese met coal and coke market remains weak

Summary of Demand, Supply, and Prices for Coking Coal and Met Coke:

Coking Coal:

• Supply:

  • Production activity is decreasing as coal mines in key areas like Shanxi and Inner Mongolia begin to shut down for the Lunar New Year.

  • Inventory levels are stable, with most mines planning to resume operations after the holidays.

  • Imported Mongolian coal remains stable with prices influenced by currency rates and logistical factors.

• Demand:

  • Downstream coking plants have largely completed their pre-holiday restocking, maintaining low inventory levels to mitigate post-holiday price risks.

  • Market activity has slowed significantly as traders prepare for the holiday.

• Prices:

  • Domestic prices for coking coal are stable to slightly weaker:

    • Shanxi low-sulfur coal: 1,389 RMB/ton (unchanged).

    • Medium- and high-sulfur grades: 1,230–1,203 RMB/ton (unchanged).

  • Imported coal prices exhibit steady trends:

    • Mongolian 5# raw coal: 920–930 RMB/ton.

Metallurgical Coke:

• Supply:

  • Most coke plants are operating at full capacity despite reduced profitability.

  • Current production levels are stable but could see minor reductions if losses persist.

• Demand:

  • Steel mills are stabilizing production as blast furnace repairs wind down.

  • Trading activity is cautious, with some steel mills and traders entering the market selectively.

• Prices:

  • The seventh round of price cuts has been implemented, reducing coke prices by 350–385 RMB/ton cumulatively.

  • Short-term prices are expected to remain weak due to high inventories and limited demand recovery signals.

Market Sentiment:

• Both coking coal and met coke markets are experiencing low activity due to seasonal factors and cautious sentiment.

• The post-holiday outlook depends heavily on supply chain recovery and steel production dynamics. Current expectations are for a continued weak market in the near term.