11 Nov 2009 09:17

Shanxi coke prices to increase in November

Shanghai. November 11. INTERFAX - The spot coke prices of Shanxi Province, China's largest coke production base, are expected to continue to increase on the back of improved purchases from domestic steel mills in November, Chinese industry analysts told Interfax on Nov. 11.

"Domestic steel product prices started to rebound from the middle of October, which encouraged increased coke purchases. If the domestic steel product price uptrend continues then Shanxi coke prices are expected to grow further," Zeng Lili, an industry analyst with ChinaCCM.com, said.

The average hot-rolled steel coil price expanded by 10 percent from mid October to RMB 3,630 ($531.74) per ton on Nov. 11 on the Shanghai market.

Zeng also noted that the higher coking coal prices, at around RMB 1,200 ($175.78) per ton and RMB 1,300 ($190.43) per ton will support Shanxi coke prices. Currently, the average spot coke price in Shanxi stands at around RMB 1,600 ($234.37) per ton to RMB 1,620 ($237.30) per ton.

"Market prices are still lower than the Shanxi Coking Industry Association's (SCIA) reference price of RMB 1,700 ($249.02) per ton for November, but they may reach that level in the coming weeks," Liu Bo, an industry analyst with Mysteel Information, said.

Zeng said that Shanxi coke producers are under pressure from low coke prices and high coking coal prices, and on average about 30 percent to 50 percent of their production capacity is idle.

Hebei Province, the neighboring province of Shanxi, increased its coke reference price by between RMB 20 ($2.93) per ton and RMB 30 ($4.39) per ton to RMB 1,650 ($241.70) per ton for November. -GD