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Analysis and Summary of Domestic Coke Coal and Coke Market Trends

Report by Guosen Futures Co., Ltd.
January 26, 2025

1. Product Performance Overview

Coke coal and coke prices experienced a trend during the recent week, characterized by steady supply and demand, but with a slow pace in buying and selling activities.

2. Fundamental Overview of Coke Coal

Production

According to National Bureau of Statistics data, China's metallurgical coke production saw a growth rate of 18% year-on-year in November 2024. However, cumulative output for the year showed a 12% increase year-on-year. This reflects a mix of seasonal demand and supply-side adjustments.

Supply Changes

Factory inspection data indicates a reduction in production volumes was not significant. Markets remained stable, suggesting no immediate overcapacity or undersupply issues were present.

3. Market Overview

Price Trends

Domestic prices stabilized slightly, reflecting stable spot transactions. The entry price for buyers decreased marginally, which may reduce pressure on suppliers but also creates room for lower prices among traders.

Inventory Levels

Main port inventories declined by approximately 7% last week, pointing to reduced demand from import/export channels. Low inventory levels support short-term market stability, but this may change with seasonal demand shifts.

4. Outlook

Ahead of spring festivals, domestic coal producers are expected to implement production cuts to align with seasonal demand cycles. This may create a supply deficit, which could support price recovery.

Demand Challenges remain present, with diminishing export opportunities and capped import channels creating a tightening cap on inventory. China's domestic policy remains cautious, ensuring stable supply chains through domestic reductions across the market.

Market Strategy

Traders are advised to monitor inventory fluctuations and manage inventory levels in anticipation of supply and demand shifts. Those with short positions should evaluate sensitivity to demand reduction risks. Forward hedging could provide protection against market volatility.

5. Conclusion

The metallurgical coke market maintains a stable, yet cautious outlook for 2025. Energy security concerns continue to shape import/export balances, especially following ongoing international trade disputes. Domestic production capacity is adequately matched to current demand projections, leaving minimal expensive opportunity unless geopolitical factors shift quickly.

This report is intended for investor awareness purposes only and does not constitute investment advice.