Sources from a steel mill in Hebei say that coal enterprises have started to urge steel mills to purchase coal in recent days. However, steel mills have already had more than enough coal, since they have laid up a considerable amount of their capacity and gone into maintenance. Industry insiders predict that the coking coal market may experience another round of decline in price.
Many steel mills have resumed production in December, but this had eased in this January and February. In February, 17 enterprises were going through maintenance, 13 mills had just declared their intention to enter maintenance, and only 4 were starting to resume production.
Taking second grade metallurgical coke price for example, in January 2009, coking coal and steel price began to rise and second grade metallurgical coal price had risen to CNY 1,900 to 1,950 per tonne by last month but by this week it was back at a level of CNY 1,500 per tonne.
One source said "At present coal enterprises are even more terrified about coal price than last year. Apart from the declining steel demand, the weakening demand of the international market is also a reason that counts. Statistics released by China's customs show China's coking coal exports in February remained merely at 23,000 tonnes which has really shocked the market."
Some analysts expressed the opinion that the price of has been set outwith the vagaries of the market. They believe that only a recovery in the economy can push up the consumption of steel. .
One analyst said: "We cannot say the economy is warming up, it's just that the declining rate is slowing down".
No comments:
Post a Comment