BRIEFING (October 21, 2020): Coke and Coal
Analysis on Market and Trading Tips
Keys Points: From Monday to Tuesday, price of domestic metallurgical coke and coking coal went up amid stabilities; that of PCI and thermal coal was stable; purchase price of PCI by steel mills went up and down.
Met Coke: Several steel mills which priced in the second half of month in Southwest China accepted 50-yuan hike put forward by coking plants. Representative coking plants in Shanxi, Hebei and Shandong started the fifth round of price hike and requested a 50-yuan hike since October 20, to which steel mills did not respond yet.
Coking plants had no inventory and that at ports was also declining, making it difficult for steel mills to replenish stock.
Blast furnace operating rate of steel mills was high, indicating strong demand. Meanwhile, strict implementation of de-capacity in Shanxi boosted price as well.
By the end of October, 5.6mn t of capacity was confirmed to be exited with newly added capacity of 750,000 t. 6.2mn t of capacity in Linfen, Yuncheng and Lvliang was asked to be diminished, which needed to follow up.
It is expected that metallurgical coke price will stay at a high level for a short term.
Table 1: Price of Domestic Standard I Grade Metcoke in Spot Market (yuan per ton)
Coking Coal: Price of low-sulfur coking coal in Linfen, Shanxi rose by 20 yuan, and was stable at 1350-1370 yuan/t (bank acceptance); that of high-moisture coal increased by 20 yuan to 1360 yuan/t, total growth in September reaching 100 yuan. Price of raw coal went up by 20 yuan to 820 yuan/t, up 70 yuan in total.
Quotation of imported coal kept falling; that of I grade coking coal dropped by $19.5 to $129-130 per ton in October; that of standard I grade coking coal declined by $2.5 to $119.5-122 per ton.
