May 27, 2022 - Shanxi Province plans to increase coal output to ensure electricity coal supply for Guangdong, Zhejiang, Fujian, Jiangsu, Liaoning, Guangxi, Hainan, Shanghai and Shandong from May to the end of December. The supply and demand imbalance of coking coal still exists, while downstream purchased on rigid demand amid the fall in coal mine inventory. But the online auctions were poor, some of the coal continued to fall.

Coke Market

On the supply side, some steel mills in Tangshan made a fourth round of price cuts of 200 yuan/mt on coke. The production of coke enterprises was stable for the time being and coke inventory at coke enterprises fell as traders actively purchased. But the coking coal market remained muted with less support for the cost side of coke.

On the demand side, operating rates of steel mills remained high and steel mills have demand for coke. But steel prices were less profitable, coupled with high steel inventory, steel mills were more willing to suppress coke prices.

In general, the procurement of traders reduced the pressure on coke inventory. But steel mills gained less profits as the demand for steel was poor, thus they were willing to suppress coke prices. It is expected that the fourth round of price cuts for coke will soon fall into place.