Coke Price in China Unlikely to Rise much after Spring Festival

Coking coal supply tends to be tight in some parts of China as the domestic coke market warms up and coal enterprises cut production.

Accordingly, coke price will hover at a high level though the price growth tends to slow down, according to Guangzhou-based South China Coal Trading Centre.

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 thus had to purchase coal and coke from local coal traders, while the coal inventory of those local coal traders is staying relatively tight. Therefore, coke price is expected to continue floating at a high level.

During the Spring Festival, a number of steel plants signed purchasing 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 of steel market for coke.

Coke price in China has surged by 40 percent in the past two months and is unlikely to further increase much but stay firm after the Spring Festival.