Recap: Chinese met coal and coke market 27 Dec. Click to read

Summary of Coking Coal and Coke Market (December 27, 2024)

Coking Coal Market Overview

1. Supply Situation:

As the year-end approaches, supply from some production areas continues to decrease. Most coal mines that have stopped or reduced production are expected to resume after the New Year, with minimal short-term impact.

In Shanxi, the coking coal market remains weak. While some local coal mines maintain steady prices, sales pressures remain high, and inventories are elevated.

2. Demand Situation:

Coke manufacturers are experiencing further profit compression, primarily focusing on controlling raw material inventories and delaying purchase plans.

Market activity has cooled significantly, with high auction failure rates for coal mines and widespread declines in pithead prices, especially for previously resilient resources.

3. Price Trends:

Prices for low-sulfur, mid-sulfur, and high-sulfur coking coal in Shanxi remain stable, with minor decreases in specific types like Lingshi fat coal and gas coal.

Imported Mongolian coal markets remain sluggish, with prices around 930-950 yuan/ton, and customs clearance volumes have reached yearly lows.

Australian coking coal continues to see price declines, with forward prices falling to FOB $190/ton.

4. Outlook:

Short-term prices are expected to remain under pressure, with recovery dependent on steel sector procurement and coke price dynamics.

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Coke Market Overview

1. Supply Situation:

The drop in coking coal prices has expanded coke manufacturers' profit margins, but oversupply in coking coal continues to pressure costs downward.

Some coke plants maintain high production levels, though environmental regulations have forced partial reductions. Inventory has slightly increased.

2. Demand Situation:

Limited demand from steelmakers due to high raw material inventories and declining pig iron output.

Steelmakers show low purchasing interest, and market transactions remain weak, contributing to growing coke inventory pressures.

3. Price Trends:

The fifth round of price cuts for coke has concluded, with mainstream prices falling by 50-55 yuan/ton.

Key benchmarks such as Fenwei Luliang quasi-first-grade coke and Rizhao quasi-first-grade coke dropped to 1,460 yuan/ton and 1,600 yuan/ton, respectively.

4. Outlook:

The market remains weak, and short-term coke prices may face further pressure. Future trends will depend on movements in steel prices and raw coal markets.