China’s metallurgical coke market is expected to see slight increases in both supply and demand this year, while the growth in demand is expected to be slower than that of supply. Consequently, coke prices are likely to fluctuate within a narrow range, according to Mysteel’s newly-published forecast for the coke sector for 2024.
China’s crude steel output may undergo a mild increase this year, the report suggests, adding that domestic demand will be bolstered by expectations that the central government will intensify efforts to stimulate the economy by taking fresh measures to shore up the real estate sector.
The country’s pig iron output in 2024 may climb by 3 million tonnes, the report also suggests, which would translate to an on-year increase in the country’s coke consumption of 1.3 million tonnes, Mysteel learned.
Moreover, although many steel mills across China last year began executing their capacity-swap plans to remove outdated capacity, it is still uncertain whether new iron- or steelmaking capacity will be brought online this year. “If the projects can be officially put into operation as scheduled, it is expected that coke demand will increase by 2.6 million tonnes,” the report said.
However, the report also warns of another factor that could deal a blow to coke demand. If China continues to adopt controls on crude steel output in 2024 – in line with Beijing’s goal to reach peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060 – the country’s coke demand might just keep flat or even retreat somewhat, the report pointed out.
As for China’s domestic coke supply this year, though coke producers are very likely to adjust their production primarily based on their financial conditions, output may still tick up in 2024, with the supply volume likely to grow by a slight 3 million tonnes, according to the report.
The fluctuations in coke production in 2023 were notably less pronounced compared with previous years, as domestic coke makers generally operated at break-even point over most of last year, which encouraged them to keep production steady rather than slashing it.
Besides, the persistent firm demand for coke from steel mills, even amidst several reductions in coke prices last year, has encouraged coke makers to maintain high operating rates that time.
With loose coke supply and a potential uptick in demand, Chinese coke prices will likely fluctuate within a tight range in 2024, the report says. During this year, Mysteel predicts that the price of quasi-first-grade coke with the maximum of 13% ash, 0.7% sulphur and at least 60% CSR in North China’s Hebei will fluctuate between Yuan 2,100-2,600/tonne ($293-362/t) on delivery and including the 13% VAT.
Furthermore, Mysteel also estimates that China could export about 8.5 million tonnes of coke and semi-coke to overseas markets in 2024, while imports of coke are seen hovering at about 200,000 tonnes, quite a low level.