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April 2016 | Steel Raw Materials


Chinese coke benchmarks surge due to tighter supply: Coking Coal and Coke Market Analysis


While higher steel prices and healthier margins have removed pressure from Chinese coal and coke benchmarks, tighter domestic coke supply availability has resulted in coke prices outpacing those for metallurgical coal.

Monetary easing, favourable mortgage downpayment policies and new infrastructure spending has boosted Chinese construction activity and steel consumption markedly in March. Chinese cement output soared 24.7% year-on-year to 201.4Mt in March, according to the National Bureau of Statistics (NBS). Cement production is a key indicator of rebar demand, the largest steel product consumed in China. Improved local construction in March provided strong support to Chinese steel demand and prices, and we believe this trend has continued into April given developments in domestic steel benchmarks. In fact, Steel First’s spot Eastern China rebar benchmark rose 28.9% month-on-month to RMB2,905/t($447/t), ex-warehouse, on Monday 25th April. Moreover, higher steel prices have alleviated pressure on major steelmaking raw materials prices, particularly metallurgical coal and coke.

While higher steel prices and healthier margins have removed pressure from Chinese coal and coke benchmarks, tighter domestic coke supply...

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