Posted on 11 Jul 2022
Daily coke production at the 230 independent coke makers across China that Mysteel regularly tracks declined to a four-month low of 544,200 tonnes/day on average over the June 30-July 6 week, or down for the third week by another 15,000 t/d or 2.7% on week, according to Mysteel's latest survey.
Over the survey period, the margins that most coke producers were earning continued to shrink, severely limiting their enthusiasm to keep producing, Mysteel noted.
After several days of pressure on the coke producers, by July 5 major Chinese steel mills had succeeded in clipping another Yuan 200/tonne ($29.8/t) off their coke procurement prices, which meant that since June 20 the mills had pared back their coke purchase prices by a total of Yuan 500/t, as reported.
Mysteel's other survey conducted among a smaller sample of 30 merchant coke producers nationwide showed that as of July 7, these makers were losing an average of Yuan 184/tonne when selling their met coke, much worse than the previous week's average loss of Yuan 42/t.
For the time being, moves by most mills to reduce production are denting the appetite of most steelmakers for inputs including coke, Mysteel observed.
Over July 1-7, the blast furnace capacity utilization rate among the 247 Chinese steel mills under Mysteel's survey slid for the third week by another 1.9 percentage points on week to 85.71%. As of the same day, the coke inventories held by these 247 sampled mills totaled 6.07 million tonnes, or down by 10,100 tonnes on week. The total was still hovering at the lowest level since Mysteel launched the survey in July 2011.
Consequently, though the coke makers have scaled back their production too, total coke stocks at the 230 independent coking plants mounted for the third week during July 1-7, rising by 4,400 tonnes or 0.8% on week to 559,500 tonnes.
As of July 7, China's national composite coke price had dropped by Yuan 196.5/t on week to Yuan 3,016/t including the 13% VAT, according to Mysteel's database.
Source:Mysteel Global
