Posted on 30 Jun 2022
Total stocks of processed coking coal at the 110 Chinese independent and affiliated wash plants in Mysteel's regular survey increased for a second week by another 76,100 tonnes or 4% on week to 2 million tonnes as of June 28, or a new high since late February 2021, according to the latest survey report. Respondents attributed the mounting stocks to a reduction in coal procurement among domestic coking plants and steelmakers.
Processed coking coal output among these wash plants was generally flat this week, declining by 4,400 tonnes/day on week to total 612,600 t/d on June 28, while their capacity utilization rate inched up by a tiny 0.02 percentage point on week to 73.66%, Mysteel's data showed.
"The sales pressure on coking coal suppliers has been intensified by the accumulation of stocks at hand and by the lackluster buying enthusiasm among end-users," said an industry source in Shanghai.
Moreover, the persisting downward pressure on domestic steel prices continued to squeeze some steelmakers' margins, forcing them to shift their cost burden to raw materials sellers such as coke plants. As a result, the coke makers have been conservative regarding coal replenishment, according to him.
By June 23, total coking coal stocks at the 230 Chinese independent coking plants in Mysteel's survey had dropped by 502,100 tonnes or 4.9% on week to 9.8 million tonnes, or a new low since December 2021, according to the database.
Nevertheless, the decline in coal prices prompted some coke producers with low stocks in their yards to begin replenishing coal resources, according to Mysteel's latest weekly survey.
For example, as of June 28, Mysteel's national composite coking coal price had edged down by Yuan 196/tonne ($29.2/t) on week to Yuan 2,485.3/t including the 13% VAT, the lowest since March 9, the data showed.
Source:Mysteel Global
