Coke producers in northern China’s Shanxi Province intend to further raise coke prices by about 60 yuan/ton after the Shanxi Coking Association Alliance adjusted up its guiding price for coke by 30 yuan, or 60 yuan/ton for May, revealed local insiders.

Coke’s guiding price in Shanxi, the country’s major production base, will touch 1,720 yuan/ton if the alliance lifts the coke price by 60 yuan/ton in June.

However, the majority of coking plants sell products at prices lower than the guiding price.

Insiders say that the price hike in May has pushed up coke’s sale price near to its cost, adding that the vertical climb of coking coal prices will also stimulate coke prices.

Analysts hold that if the price adjustment is accepted by downstream industries, the domestic coking companies will turn from loss to profits in the second quarter.

Steel plants haven’t yet released a solid price adjustment plan for coke.

Market analysts note that the domestic steel industry has already bottomed out and may have the ability to absorb a rise in the price of coke. The key medium and large enterprises in northern China’s Hebei Province first began realizing profits in April.

Wang Zhaohua, an analyst with Guodu Securities, said that the domestic steel industry’s climate index dipped down to the bottom and is now expected to warm up due to the persistent growth in money supply and recovering investments in real estate sector.

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