Chinese domestic coke prices set to be cut again: sources

  • Friday, April 3, 2020
  • Source:ferro-alloys.com

  • Keywords:price, cut
[Fellow]Chinese domestic coke prices set to be cut again: sources

[ferro-alloys.com]Chinese domestic coke prices, long under pressure as steel mills struggle with thin or zero profit margins, were set for a fifth round of price cuts -- by Yuan 50/mt ($7/mt) -- in seven weeks, market sources said.

The price cut -- proposed in major regions including steel mills in Shanxi, Hebei and Shandong provinces -- will most likely be accepted and will bring the total fall to Yuan 250/mt, the sources said.

Coke producers said prices were under pressure from lackluster demand as steelmakers struggled with weak margins amid poor downstream sales.

"I think the price cut will be accepted, even though many coke producers are running at losses," a coke producer said.

"Steel sales are not so promising, especially in the hot rolled coil sector as household appliances and automobiles sales saw little signs of improvement," another coke producer said.

"Profit margins estimated to be around Yuan 100-200/mt for domestic rebar, while hot rolled coil producers are at a break-even point."

Coke plant margins

"Some coke producers in Shanxi have rejected the price cut proposal, and proposed a price uptick of Yuan 50/mt instead. However, the majority of coke plants would still accept the price cut in light of weak demand," a coke producer said.

Coke plants' profit margins vary across China, depending on their locations.

Sources said margins after five rounds of price cuts would range from Yuan 50-80/mt in Shandong and Jiangsu, and Hebei would be at Yuan 0-20/mt. However for coke plants in Shanxi are making a loss of Yuan 0-50/mt.

"We had reduced 20% of production capacity in March and likely for April as well," a northern China coke producer said, as loss-making margins meant producers will have to trim output.

S&P Global Platts assessed Coke 12.5% Ash DDP North China at Yuan 1,700/mt Thursday, down 2.8% week on week, or at the equivalent of $249.44/mt FOB China, down 3.1% on week.

(S&P Global Platts)

  • [Editor:王可]

Tell Us What You Think

please login!   login   register
  • Buy & Sell

 
Please be logged in to comment!