Saturday,Feb 19, 2011
Sanming Steel, based in East China’s Fujian Province, would cut its purchase price for coke, the key steelmaking material, by 100 yuan/t, because of high coke stocks the company presently holds, National Business Day reported.
The purchase price for grade II met coke delivered to the steelmaker would be 2170 yuan/t, the company said on Feb 16.
It is learnt that Sanming Steel purchases 50-60 thousand tonnes coke each month, but presently it already has 100 thousand tonnes of coke stocks. The company would have to pay fee to store coke at ports, if more deliveries reach, one official was cited as said.
Analysts say the move is aimed to relieve cost stress in a short term.
Currently, steel mills in Southern China have already had coke stocks enough for use of more than one and a half months.
Coke enterprises in Shanxi, Hebei, and other provinces all increased their ex-works prices by 50-80 yuan/t. Coke enterprises face higher production costs due to the continuous rise in coking coal price after the Spring Festival.
An insider disclosed the production cost of coke will be 2080 yuan/t, and coke producers still suffer loss of 30 yuan/t, based on the lowest price of blended coking coal was 1600 yuan/t.
Price cuts by steel mills in southern China was only a short-term moves, and coke price will still be on rise in long term due to price surge in domestic steel market.
(sourced:en.sxcoal)
Tags:fee to store coke at Chinease ports, inventries, deliveries, market analyst, Coke Enterprises, Shanxi, Hebei, supply
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