Regarding China coke and coking coal markets in 2019, SteelHome Steel Development Research Center (SteelDRC) made a report titled Review of China Coke and Coking Coal Markets in 2019 and Outlook for 2020.

Abstract:

In 2019, coke price showed a downward trend amid fluctuation, with fluctuation ranges shrinking compared with those in last year. But average price was down 243 yuan/t or 11.44% from 2018. Meanwhile, coking enterprises’ profits fell drastically.

Changes in seasonal demands, outdated capacity reduction carried out by coking plants, implementation of policies on environmental protection and production curbs, profit transmission of industry chains and alterations in steel markets are the major reasons behind price changes. Because of different products and structural demand on a specific product, as well as imbalanced regional supplies, price of premium coke kept firm while coke on dry basis was favored by steel mills. In Central China, Western China, and Southern China, coke price declined slowly with different price adjustment cycles.

In 2019, price of China coking coal stabilized at first and then fell, price of coke was down amid stability. As imported coking coal had the upper hand, China coking coal market suffered great pressure, long term contract prices of leading large coal mines maintained unchanged, prices of local coal mines fluctuated widely.

For the time being, Sino-America trade war enters a stable period, but China is under great downward pressure on the economy growth. In the Fourth Quarter Meeting, Monetary Policy Committee of the People's Bank of China stated that sound monetary policies reflect demand on reverse cyclical adjustment, and thus great efforts should be made to smooth out the monetary policy transmission mechanisms and to lower social financing costs. It is expected that price of China coking coal will decline amid stability, and price of coke will go ups and downs, and coking plants’ decapacity will have a profound impact on the market.

Outline

I. Review of China Coke and Coking Coal Markets in 2019

1. Features of Coke Market in 2019

1.1 Coke production increased fast

1.2 Coke price fell amid stability

1.3 Coke imports dropped drastically

1.4 Coking plants’ capacity utilization rate in 2019 higher than that in 2018

1.5 Coke at ports entered the destock cycle and coking plants’ inventory fell at the end of 2019

1.6 Supplies and demands in China coke market were basically balanced

1.7 Independent coking plants’ profits were below average level

1.8 Outdated capacity reduction kept furthering

2. Features of Coking Coal Market in 2019

2.1 Price of coking coal was down amid stability

2.2 Imported coking coal increased drastically

2.3 Coal production capacity was unleashed in an orderly manner

2.4 Coal supplies were available

II. Outlook for China Coke and Coking Coal Markets in 2020

3. International environment

4. China environment

5. Industrial policies

6. Demand forecast

7. Supply forecast

8. Price forecast

Appendix:

Figure 1: Metcoke Output and Cumulative Annual Output from 2015-2019

Figure 2: China Metcoke Price and Coking Coal Price from 2016-2019

Figure 3: China Metcoke Exported Volume and Average Price from 2013-2019

Figure 4: BF Operating Ratio and Coking Plants Utilization

Figure 5: Metcoke Inventory in 100 Independent Coking Plants and in Main Ports

Figure 6: Metcoke Output and Average Daily Pig Iron Output Since 2016

Figure 7: Monthly Average Profit of Coke per Ton in China Coking Plants

Figure 8: Comparison between Imported Metcoke Price and China Coke Price

Figure 9: Coking Coal Imported Volume in Main Imported Countries

Figure 10: Ratio of Coke to Iron and Coke Price from 2018-2019

Table 1: Metcoke Price Changes in Main Producing Areas from January to December, 2019

Table 2: Metcoke Exports Comparison between 2019 and 2018

Table 3: Relevant Policies on Outdated Coke Production Capacity Reduction Carried out in Main Producing Areas

Table 4: China Coking Coal Price Changes in Main Producing Areas in 2019

Table 5: Coal Mines Production Capacity

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