The China Coking Industry Association has said that coking coal imports are favourable to the stabilisation of domestic coal price, but there is still room for coking coal price drops at home and abroad.
Domestic coke prices continue to fall while the coking coal price remainss high. The CIF price for imported coking coal now stands lower than the purchase price in domestic market.
According to the CCIA, coking coal imports can help stabilize domestic price. As global crude steel output falls, demand for coking coal will wane.
Analysts forecast that China's coking coal consumption in 2009 will decrease by approximately 50 million tons from a year earlier, owing to steel output fluctuation, structural adjustments, obsolete capacity elimination, decreasing coke exports, etc. Statistics show that China may reduce demand for coke this year together with slumping coke exports, implying a downtrend for coking coal demand.
CCIA said that under the influence of global crude steel output cust and shrinking demand, coking coal price may settle at around USD 100 per tonne.
Source: China Securities Journal
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