Friday, April 3, 2009

Shanxi Coke Guide Price Falls

The Shanxi Coking Industry Association has put forward its coke guiding price for April which has dropped by CNY 100 per tonne to CNY 1,600 per tonne FOT.

In the current market, quasi-first grade metallurgical coke in Taiyuan, Shanxi, is offered at CNY 1,600 per tonne and second grade metallurgical coke at CNY 1,500 per tonne. Under the present circumstances, the association has called for the whole industry to firmly stick to the production cut order, with the production cut extent staying at 60% to 70% and even 100% in some enterprises.

Sources said that the union of coke enterprises in Shanxi loosened the production cut extent to 40% to 50% in February. However the union had to cut production more sharply due to the weakness of the market. In the Hongdong area, coke enterprises cut their production by 50% to 70%.

An industry insider said "Steel mills are still burdened by stock pressure now, and it seems that steel prices will continue to decline. This indicates that coke enterprises will still have a tough time in selling.”

Owing to the weakening demand for coke, coking coal price has also pointed to the downside. In some local coal mines in Shanxi, the coking price has dropped CNY 30 per tonne to CNY 50 per tonne. Some industry insiders say that this is inevitable under current circumstances where the steel market remains gloomy.

Source: Steel Guru

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