Reports from China suggest that an increase in the price of coke since last November has led to a slight recovery in the industry earlier then expectation.
Mr Wu Shili General Manager of a Shanxi coking enterprise said that although the price of coke is still around the CNY 1750 per tonne guideline set by the Shanxi Coking Industry Association, it is likely to continue a modest upward swing as most coking enterprises have cut production by over 50%.
Mr Wu said that coke purchases during the Spring Festival were insufficient, while many steel mills have almost cleared out their inventory. Some small mills are being supplied directly by coking enterprises and have disclosed that they could even accept a higher price in order to obtain supplies.
Some insiders have suggested that the coke price bounce would soon come to an end but Mr Yu Changbing of the Shanxi Coking Industry Association disagrees. Noting the recent rise in steel prices, Mr Yu said "Last year, almost all steel mills suspended their productions to some extent, and now their products stockpiles have been cleared out. Moreover, as the overall economic situation is getting better, the supply-and-demand conditions in both steel and coke markets have witnessed an evident change, so the prices of steel and coke are unlikely to decrease in the short term".
Mr Yu added that the government has strengthened efforts to close small mines, which could then drag down the coking coal output and would push up the prices.
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