Latest Update in the SMM Coal Market

[SMM Daily Briefing on Coal and Coke] In terms of supply, most coke enterprises are already operating at a loss, with their production enthusiasm dampened. As a result, coke supply has contracted, but shipments remain basically normal, and inventory has not accumulated significantly. On the demand side, the steel market is gradually weakening, and steel mills' purchase willingness is low. Moreover, the Tangshan region has received emission reduction notices, requiring some steel mills to implement production cuts during specified periods, further suppressing coke demand. Steel mills are mainly purchasing coke as needed. In summary, the coke market is exhibiting a pattern of weak supply and demand, and the coke market will operate in the doldrums in the short term.

[SMM Daily Coke Market Brief Review] Mainstream steel mills in Hebei and Shandong regions implemented a coke price cut of 50-55 yuan/mt, marking the fourth round of price reductions. In terms of supply, affected by environmental protection measures and the shift from profit to loss, the production enthusiasm of some coke enterprises was dampened, leading to voluntary production restrictions and a contraction in coke supply. On the demand side, the purchase willingness of steel mills was low, and the Tangshan region received a notice on emission reduction, requiring some steel mills to implement production cuts during specified periods, further suppressing coke demand. In summary, the fourth round of coke price reductions has been implemented, and the bearish sentiment in the market has been somewhat released. The coke market is exhibiting a pattern of weak supply and demand, and the short-term coke market is expected to remain in the doldrums.

[Profits Under Pressure, Coke Plant Operations May Continue to Decline Next Week] This week, coke prices remained stable, having no negative impact on coke plant profits. However, on the cost side, coking coal prices also remained stable this week, with no further concessions from coal mines. Looking ahead, due to the overall loose supply-demand pattern and low downstream purchase willingness, coke prices are expected to fall further. However, the decline in costs will narrow, making it difficult to promptly restore coke plant profits. It is anticipated that coke plant profits will still face downward pressure next week.