Coke: first decline then rise

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Last week, the coke futures market first declined before recovering. 　　In terms of spot prices, the closing price for grade A coke at Rizhao Port (including taxes) is 2400 yuan, with a corresponding base spread for coke of 265 yuan. 　　Overall, a consensus was reached in the Sino-U.S. trade talks over the weekend. Under this influence, billet prices rose sharply last Sunday, and profits for downstream steel mills may improve. Coupled with the fact that steel mills reduced production less than expected earlier on, demand continues to provide some support for coke prices. On the supply side, coking enterprises in Shandong, Jiangsu and other regions have significantly reduced production due to severe air pollution, while some coking ovens in Hebei have been shut down, leading to a contraction in supply. However, given the weak willingness of steel mills and traders to rebuild their inventory levels, and the ongoing accumulation of coke stocks in coking plants, the probability of a decline in demand remains high; thus, it is expected that the price of coke will fluctuate significantly. Source: China Chemical Industry News