Shanxi coke producers seek for another price increase Viewpoint,  Price 2017-07-17 17:06:00

After a price rally of 100 yuan/t last week, coking plants in China's leading coke base Shanxi are seeking for another 50 yuan/t increase of the steelmaking material, backed by stable demand and low stocks.

Most coking plants in the province ran at 80-90% of capacity as they almost met environmental requirements. Low or even no stocks were seen at local plants, mainly due to good sales, which brought producers a slightly higher profit to an average level of 70 yuan/t or so.

A Jinzhong-based producer said they ran at full capacity but had no stocks left, with selling 5,400 tonnes of products a day.

Another producer from Changzhi reported 20-30% of capacity restriction in the local region. "For now, our shipments are smooth and fast. We only have 8,000 tonnes of coke left," he added.

Fat profits and low steel products stocks motivated steel mills to maintain high production. They were likely to postpone furnaces overhaul to August.

However, steel makers were still leery of large coke procurements given safety stocks and strict environmental checks. Mills in Hebei had 8-9 days' inventories while stocks at Shandong-based mills could averagely cover 10 days of use.

A Taiyuan-based coke producer reported full production at his plant. He felt bullish on the near-term price hike but warned price might drop as easily as it went up. "Let's see what will happen during the steel mills' overhaul in August."

(Writing by Alex Guo   Editing by Jessie Jia)
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