Interfax reported that Chinese coke producers are earning profits again now that demand has rebounded amid relatively low coking coal prices.
Mr Ma Xiaoguang a coal analyst with metal information portal Umetal, estimated that coke producers are earning profits of between CNY 50 per tonnes and CNY 100 per tonne.
He said that the market price of coking coal is sitting at about CNY 1,200 per tonnes, which is around the same price level of coking coal at the beginning of this year. Coking coal prices peaked at the end of July at CNY 2,200 per tonnes. Annual contract prices for coking coal are about the same as current market prices, though contract prices are usually adjusted every quarter. Meanwhile, coking coal companies are offering discounts of CNY 200 per tonne to some steel mills in southern China that purchase coking coal directly.
Mr Ma said that coke producers have also benefited from an upsurge in downstream demand as a number of small sized steel mills resumed production at the beginning of December in response to growing demand for steel. The situation suggests that coke demand grew in December, which in turn caused coking coal prices to rebound recently.
According to Umetal, coke prices in Shanxi Province, China"s largest coke producing region rose to between CNY 1,500 per tonnes and CNY 1,600 per tonnes as of December 30th up from CNY 1,100 per tonnes to CNY 1,300 per tonnes on December 1st.