Coke price rebound in China likely to stop in March

China Mining reported that coke price rebounds in parts of China since January 2009 are expected to last until most coalmines resume production in March, and the price rebound is unlikely to continue.

Analysts hold that the coke price rebound is related to the decline in coking coal output during the Chinese Spring Festival.

According to statistics from Umetal, coke prices have surged by 40 percent in the last two months. The price of second-class metallurgical coke in East China hit CNY 1,700 per tonne to CNY 1,850 per tonne on February 3rd up by CNY 150 per tonne to CNY 250 per ton from the January's starting price.

The guiding price for coke set by Shanxi Coking Industry Association was CNY 1,750 per ton in January up by CNY 150 per tonne from the CNY 1,600 in December of 2008.

Analysts with Umetal noted that the coke price surge was caused by the production reduction and suspension of coalmines in Shanxi province before the Spring Festival, which led to the coke supply shortage. Meanwhile, the transportation volume of coal and coking coal decreased, hardly meeting demand by steel plants.

With the implementation of the government's macro-economic stimulus plan, the production of steel plants will boost demand for coking coal. Insiders hold that coke prices may fall with the end of the Spring Festival and production resumption of coalmines in March.