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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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May 2012 | Steel Raw Materials


China's domestic prices roll over: Coke and Coking Coal Highlights


Recent monetary statistics disappoint, forcing Beijing's hand once more.

Prices for Chinese domestic coking coal were unchanged last week, with hard coking coal trading at Rmb1,480-1,580/tonne ($235-$251/tonne). Transaction volumes were limited in number, we suspect the actions of steel mills only purchasing to meet their orderbook requirements. On the surface, there appears to be limited finished steel demand growth in the market, evidenced by rebar futures continuing their declines last week. While recent blast furnace output rates have been high, we expect these to come down as coking coal purchasing volumes fall.Nevertheless, crude steel production reached record levels; China’s April production data suggests an annual output of 737m tonnes in 2012. Although production is still at record levels, the year-on-year growth rates are diminishing. Through 2008-2011, the average monthly y-o-y growth rate was around 9%, in contrast, the average growth through 2012 so far has been just 0.6%. The slowing...

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