Coke plants in China raise coke prices

The main independent coke producers in North and East China, which are the country's leading coke and steel refineries, have announced their coke selling prices increase by 50 yuan per tonne ($ 7.6 per tonne) effective December 1. Now, as in previous campaigns, coke producers are citing strong demand from their steel customers and limited supplies, exacerbated by campaigns to cut coke capacity in some provinces.

In announcing its decision on Monday, a large independent coke plant in Hebei province in northern China, for example, noted that a 50 yuan /ton increase in coke prices would be linked to sales from December 1. After adjusting the plant's dry quenching coke with 12.5% ​​ash and a maximum of 0.65% and not less than 60%, CSR will cost RMB 2,420 /ton ex factory, including 13% VAT.

As of December 1, the national price of composite coke rose by 7.6 yuan per tonne over the week to 2114.2 yuan per tonne, including 13% VAT, a new high since January 4, 2019.

Major steelmakers in the same region have yet to publish news of any coke purchase price decisions, but market participants are generally positive about the agreements to raise coke prices.

While coke producers are keeping their operations strong, coke inventories at their plants continue to decline, a market watcher in Shanxi in northern China, the country's largest by-product coke base, said. “Some local businesses (in Shanxi) had to control the volume of coke they supply to customers to ensure a stable supply,” he said.

As reported, on November 26, total coke stocks at 230 independent coke plants in China, monitored weekly by Mysteel, hit a two-year low of 603,500 tons. the rate was still high at 92.5%. According to the data, since May the rate has remained above 90%.

In addition, the Shanghai-based futures analyst said the progress made in China to eliminate obsolete coke facilities will support domestic coke prices. “If the targets for capacity reduction are strictly implemented, further increase in coke prices is possible,” he said.

China is actively moving away from inefficient coke-chemical facilities as part of efforts to reduce air pollution and optimize the sector's industrial structure. This year is the last year provincial governments have if they want to fulfill the central government-approved Blue Sky Guarantee, the results of which are to be reviewed by Beijing.