Prices of coking coal, one key ingredient for steel production, further decreased in China's major production areas, as miners tried to boost sales amid weak buying from coke and steel plants that have curtailed output under stricter environmental policies.
One large Shandong-based miner adjusted down coking coal prices by 50 yuan/t on November 1, partly in response to downstream buyers' price cut appeals. It also offered larger discounts for those purchase more.
While no price cuts have been announced by other miners, industry insiders expected prices to further decline, as steel mills and coke plants have been restricting output under tougher environmental protection measures.
The Chinese government has ordered coke firms and steel mills to cut production in a move to tackle hazardous smog during the winter heating season.
One producer source in Feicheng, also in Shandong province, said that they wanted to uphold coking coal prices for a while, despite high inventory pressures and tepid demand. "We plan to cut prices when coking plants consume most of their stocks," he said.
The source put the ex-washplant price of coking coal with 0.8% sulfur, 8.5% ash, 38.5 VM and 80-85 GRI to 1,210 yuan/t, on bank's draft with VAT.
Demand for washed coal has been limited in Shanxi, the nation's top producer of the material, as coke firms were ordered to slash production as air quality worsened with the start of winter heating.
In Linfen, one major coking coal production area in Shanxi, some coke firms have halted production on November 1, local sources told sxcoal.com.
One Puxian-based miner source said their mine has just resumed production after passing check of local safety watchdog, without much output or new orders.
"The price of primary coking coal has dropped sharply, so will 1/3 coking coal," the source said. The price of washed coking coal with 0.9% sulfur, 10.5% ash, 38% VM and GRI 85-98 was 1,420 yuan/t, ex-washplant with VAT.
One Changzhi-based mine source, who held a wait-and-see attitude toward the market, said they haven't cut coking coal prices as their stocks are not so high, although some local mines did cut prices.
(Writing by Zoey Yan Editing by Harry Huo)
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