The Chinese market has rebounded sharply today regarding coke production. From the early hours of the morning, coking/coking coal/electric coal increased to the maximum limit. This gave a lot of confidence to other steel circles. HRC/debar performed pretty solid today with around 100rmb up. It is the first time coke stock has fallen below 10 million MT and it is also the first time American coke has arrived in China.
After tensions over Mongolian coking coal, Australian coking and covid issue, the supply situation is completely out of control. With some high prices offered due to the domestic price increase, the export market has stalled, and demand does not follow these offers.
The import offer is low and the warehouse billet price has made a lower premium than before. The domestic billet index was stable @ 4910 and the steel export index increased by 5 usd. Raw material IO started to recover after a long series of adjustments. The coking coal situation has filled the cost gap that iron ore formerly occupied. The other big problem is that the BDI goes above 4000 and the congestion situation in Chinese ports worsens with 1,000 ships lining up outside. China's economy appears to be slower, with most SEA countries blocked due to increased Delta cases.
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