Sxcoal Issue 20# | Where does China's domestic coking coal market head in 2024?

China's washed coking coal supply is forecast to dip 0.1% YoY to 493 Mt in 2023, imports to reach 102 Mt, surging 59.5% from 2022, while coking coal demand is projected to increase by 6.5% to 592 Mt.

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China's demand for coking coal increased moderately last year, driven by a rebound in steel demand amid improving macroeconomic environment and the unexpected increase in steel exports.

During the first half of 2023, China's domestic coking coal supply climbed steadily, and Mongolian and Russian coal imports increased significantly. The lifting of the unofficial ban on Australian coal imports also contributed to the overall supply increase.

However, coke and steel enterprises adopted a low-inventory strategy, due to poor profitability and the anticipation of continuous growth in coking coal supply, causing a sustained decline in coking coal prices.

In the second half of the year, production at coal mines was frequently interrupted by mining accidents and intensified safety inspections, leading to a tightening of domestic coking coal supply. This, coupled with increased downstream procurement but challenges in building up inventories, helped coking coal prices regained strength.

Overall, although domestic coking coal supply experienced a slight decline throughout the year, the continuation of the "zero tariff" policy resulted in a historic high in coking coal imports. Coking coal supply and demand remained relatively balanced, and the price of coking coal significantly shifted downward year-on-year.

The CCI index for Shanxi low-sulfur primary coking coal averaged at 2,159 yuan/t in the year, down 560 yuan/t from the year prior.

In 2023, China's washed coking coal supply is forecast to dip 0.1% on the year to 493 million tonnes, while imports could reach 102 million tonnes, jumping 59.5% from 2022, according to the latest annual report from industry consultant Fenwei.

The report also projected China's coking coal demand to increase by 6.5% to 592 million tonnes last year, and expected continued growth in 2024 amid further expansion of coke production capacity, even though coke demand will be impacted by domestic and overseas market situations.

However, washed coking coal supply is expected to decline as production is likely to drop due to a potential slowdown of capacity release and safety inspections.

China's net coking coal imports in 2024 are estimated to reduce following the reinstated import tariff, import demand of overseas newly-added coke batteries (e.g. for Australian coal) and uncertainties in coal imports from Mongolia and Russia (i.e. whether the high imports will sustain).

Accordingly, coking coal prices may move upwards amid potentially widening of imbalance because of supply decline and demand increase.

In the latest report titled "2023 China Coking Coal & Coke Market Study and 2024 Outlook", Fenwei provides a comprehensive and in-depth analysis and prediction for the coking coal and coke markets in 2023 and 2024.

The report thoroughly interprets the market conditions and significant policies in 2023 and offers detailed analysis and forecasts for 2024, covering aspects such as policy environment, demand, production and supply, market prices, and imports and exports.

The report, with rich data and charts, and clear analytical logic and distinct perspectives, serves as a vital reference for industry professionals interested in tracking the development and market trends of the coking coal sector. Subscribe now for valuable insights into industry dynamics and market trends.