SunSirs: China Coking Coal Market Showed a Phased Rebound in August

In the first half of August, due to factors such as policies, supply, and demand, the coking coal market showed two phased increases, and in the second half, the market price showed a weak and stable trend. According to the monitoring system of SunSirs, as of August 29th, the price index of SunSirs's coking coal was 1,418.75 RMB/ton, an increase of 1.98% from the beginning of the month.

On the supply side: In the first half of the month, due to the influence of national policies, the release of production capacity in major production areas such as Shanxi and Inner Mongolia was restricted. In addition, security checks in Shanxi became stricter, coal mines suffered losses, and geological conditions in working faces deteriorated. Some high cost mines reduced or stopped production, affecting the supply of coking coal by about 800,000 tons per month. The supply side tightened, inventory decreased, and coking coal prices rose twice. The supply side is slightly loose in the second half of the month, with some coal mines having 2-3 day maintenance plans, and the coking coal market price is gradually stabilizing.

Downstream: At the beginning of the month, downstream steel mills had good profits, low inventory, and were more proactive in purchasing raw materials, which led to an increase in coking coal consumption and provided some support for coking coal. At the same time, the surge in electricity demand during the high temperature season in July, coupled with the release of seasonal replenishment demand from downstream enterprises, further boosted procurement willingness. The pace of downstream inventory replenishment has slowed down in the second half of the month, resulting in weak terminal demand. The profit recovery of steel mills is limited, and the purchase of coking coal is mainly for essential needs, with a low willingness to speculate and replenish inventory. ‌

According to analysts from SunSirs's coking coal market, there were two phased increases in the coking coal market in August. Influenced by national policies, coal mine production cuts led to tight supply of coking coal, resulting in loose inventory in the latter half of the year; The downstream demand has significantly increased, and there is a large profit margin for replenishing inventory, which has driven up the consumption of coking coal. Until the end of the month, the pace of replenishing inventory slowed down, and demand was weak. It is expected to operate steadily and weakly next month. More attention still needs to be paid to the supply and demand situation and the transaction of building materials.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.