coking coal market in Hebei Province operates stably recently and is slated to increase at a later stage.
In late July, domestic steel market eyed an uptrend. MySpic on August 2 was seen at 177.4 up by 0.27% DoD, 0.7%WoW or 2.12%MoM. In line with the ongoing improvements of steel market, steel mills and coking plants are more willing to replenish coking coal stocks.
The government is planning to shut down 130 small coal mines in Hebei Province in the near term with 6.6 million tonnes of outdated capacity involved. Yet most of the crucial coking coal supply relies on local small mines. Thus the shutdown may affect the normal production of some small coking and steel companies.
The coking coal from Inner Mongolia to Hebei remains tight, leaving an impending upward price hike of CNY 10 per tonne to CNY 20 per tonne this month. Simultaneously, due to the consolidation of coal mines in Shanxi, raw coking coal supply limitation has sharply slowed down the supply of coal to Hebei. In addition, more small and medium coal washeries in Hebei, being subjected to thin profits have to curtail or stop production. The overall strain of coking coal supply thus makes imports a favorable option.
(sourced from MySteel.net)