China Mining reports that coking coal supply in China is tight in some parts of China as the domestic coke market warms up and coal enterprises cut production.
According to the Guangzhou-based South China Coal Trading Centre, the coke price will hover at a high level though the price growth will slow down.
Affected by busy transportation during the Spring Festival holidays, less coal and coke has been transported to downstream areas of China from coal-producing bases. Most steel and iron plants and other downstream sectors have thus had to purchase coal and coke from local coal traders, whose coal inventory levels remain relatively tight. Therefore, the coke price is expected to continue at a high level.
During the Spring Festival, a number of steel plants signed purchase orders with coking enterprises, which plan to resume production after the Spring Festival. Nevertheless, most coking enterprises are still undergoing production reduction because of weak demand in the steel market for coke.
The Coke price in China has increased by 40% in the past two months and while it is unlikely to increase much further it is expected remain firm for the time being.
Sources: Steel Guru, China Mining
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