This is the third time the steelmaker has cut its coke purchasing price in August. Prior to this, Hebei Steel cut its buying price in early and mid-August by Yuan 100/mt each time, amounting to a total price cut of Yuan 270/mt this month.
Hebei Steel had been buying domestic coke, with 65% CSR (coke strength after reaction), 12.5% ash and 0.65-0.7% sulfur, at a monthly contract basis until July this year, and its price has been regarded as an important reference price for coke in north China. The marketing manager for Hebei Steel was not available for comment Thursday.
CHINA DOMESTIC COKE PRICE DROPS MODERATELY
Meanwhile, China's domestic metallurgical coke market "took a breather" during the past week, a trader said, with a relatively smaller price dip compared with a sharper drop in the past two weeks.
Platts assessed China domestic coke Yuan 15/mt ($2.40/mt) lower on week to Yuan 1,445/mt delivered duty paid Tangshan mills, including 17% value-added tax and three month credit, for coke with 62% CSR, 12.5% ash, 0.65% sulfur and 5% total moisture. "Mills slowed down the price cuts this week," said a Shanxi-based coke producer, adding that the price drop of his coke was only around Yuan 20-30/mt. A Hebei-based coke producer agreed, saying that his selling price didn't change compared with last week.
A Tangshan mill purchasing manager said he was buying spot coke at around Yuan 1,420/mt delivered to mill for coke with 65% CSR, 12.5% ash and 0.65% sulfur, and Yuan 1,370/mt delivered for 60% CSR, 13% ash and 0.7% sulfur coke. On the sell side, a Shanxi sales manager said she is selling coke with 60% CSR, 12.5% ash, 0.65% sulfur and 1% TM coke at Yuan 1,350-1,400/mt free-on-rail, and another sales manager said he is selling at Yuan 1,250-1,300/mt to central China steel mills for coke with 60-65% CSR, 13% ash and 0.7% sulfur.
For lower quality coke, sources from trading companies and mills agreed that coke with 55-57% CSR and around 13% ash, 0.7% sulfur was being traded at around Yuan 1,350/mt delivered Tangshan. However, a Beijing trader said that it is a "good price for sellers and you need to grab it quickly." Payment term for the above trades are with four-to-six months credit generally.
Elsewhere, two Tangshan steel mill procurement managers said they would settle August coke buying price at around Yuan 1,500/mt delivered for coke with 60-63% coke, 12.5-13% ash and 0.65-0.7% sulfur. Another sales manager said he would need more time to review his August coke price after hearing of the new Hebei Steel level of Thursday.