SunSirs: The First Round of Price Rise and Fall in China Coke market in February 2024

According to the commodity market analysis system of SunSirs, in February 2024, the coke market experienced a round of decline. As of the time of publication, the price of quasi first-class metallurgical coke in Shanxi region was 2,125 RMB/ton, a decrease of 4.57%.

On the supply side, the coking coal market remained stable in mid to early February and fluctuated lower at the end of the month, but the overall decline was not as significant as that of coke. At present, the mining area has basically resumed normal production and increased supply. With the resumption of normal logistics, the mining area has actively shipped goods recently, and the market atmosphere has improved. Downstream coke enterprises are mainly affected by profits and replenish inventory as needed.

According to the commodity market analysis system of SunSirs, the third round of coke market price reduction was implemented in February 2024, with a cumulative decrease of 300-330 RMB/ton, and the fourth round of price reduction of 100-110 RMB/ton was initiated at the end of February. Affected by the lifting and lowering of prices, coke companies are currently experiencing widespread losses, with an increasing number of companies actively limiting production. Currently, the operating rate has significantly declined, and the comprehensive operating rate has fallen below 70%. The supply of coke has significantly tightened compared to the previous period. However, due to adverse weather conditions before and after the Spring Festival, some regions in the north have poor shipping, resulting in overall high inventory in coke companies. Currently, the inventory in coke companies is high, and they are actively reducing inventory. In terms of demand, downstream steel mills have recently seen low profits. Weak purchasing enthusiasm, maintaining on-demand replenishment of coke. Affected by the fourth round of price cuts, the mentality of the spot market is weak, and in recent times, the mentality has been cautious, resulting in a significant decrease in inquiries entering the market. At the end of the month, coking enterprises held a meeting, during which they stated that coke had been reduced by 300-330 RMB/ton for three consecutive rounds, while raw coking coal had only been reduced by about 100 RMB/ton in the same cycle. Currently, enterprises are generally losing money and will continue to adhere to the principle of "production based on sales" in the future. Overall, the coke market will continue to maintain a weak and stable trend in the near future, with a focus on the inventory situation of coke in various links in the future.

The coke market in Shandong ports is operating weakly, with a quasi first level outbound price of around 2,140-2,180 RMB/ton and a first level outbound price of 2,240-2,280 RMB/ton. The atmosphere in the port market is somewhat wait-and-see, while the spot market is operating weakly. The fourth round of price cuts has affected the market atmosphere, and the sentiment towards port consolidation is weak.

Freight is a barometer that reflects the mentality of the port market. When the port procurement mentality is positive, freight increases. Port mentality is wait-and-see, and freight prices decline when purchasing intentions are low. This month, the overall port freight prices have declined, and currently the overall port trading is weak, with a strong market wait-and-see atmosphere.

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