Metallurgical coke prices have increased by two rounds totaling 100-110 yuan/t in key production areas in China in the past two weeks, and the upward momentum continues during the last working day ahead of the National Day holiday starting from October 1.

Following many coke producers' proposal of the third round of 50-55 yuan/t price hike late last week, major steelmakers responded early this week, agreeing to lift their purchase prices of wet- and dry-quenching met coke by 50 yuan/t and 55 yuan/t, respectively, effective October 1, Sxcoal learned.

In northern China's Hebei province, one large steel company raised purchase prices of Grade I wet-quenching coke to 1,860 yuan/t and Grade I dry-quenching coke to 2,120 yuan/t, delivered basis with VAT and on banker's draft.

A main steelmaker in eastern China's Shandong province adjusted up coke purchase prices by 50-55 yuan/t for the third time. The new prices for Quasi Grade I wet-quenching coke rose to 1,620 yuan/t for coke suppliers inside the province and 1,630 yuan/t for those outside the province. The Quasi Grade I dry-quenching coke increased to 1,935 yuan/t, delivered basis with VAT and on banker's draft.

A few producers even kicked off a fourth round of price hikes on the day before the holiday. One large coke company in Hebei proposed on September 30 to increase coke prices by 50 yuan/t and 55 yuan/t for wet- and dry-quenching met coke, effective October 3. The price for Quasi Grade I dry-quenching coke will climb to 1,940 yuan/t, ex-plant with VAT and in cash.

Market sentiment warmed up amid bullish macroeconomic policies, shoring up both ferrous and ferrous raw material futures, as well as steel products prices. Coke demand significantly strengthened among steel mills and speculative traders.

On September 30, the most active coke futures contract for January delivery on the Dalian Commodity Exchange ended the daytime session 10.99% higher day on day at 2,257.0 yuan/t ($321.8/t). Coking coal and steel product futures also witnessed noticeable 10.98% and 6.99% increases on the same day.

Prices for steel products registered notable jumps, which, together with active steel transactions, improved mills' profitability and accelerated de-stocking. This spurred mills' enthusiasm for accelerating the pace of blast furnace resumption, leading to higher molten iron output and buoying their buying interest in coke.

Data showed the price of Shanghai HRB 400 rebar (20 mm) stood at 3,600 yuan/t on September 29, up 290 yuan/t from the week-ago level, while Shanghai hot-rolled coil (3.0 mm) rose 420 yuan/t on the week to 3,660 yuan/t.

Meanwhile, given the constrained shipping capacity during the week-long holiday, steel firms largely chose to replenish coke stocks in advance. Traders also made active purchases to seek higher profits.

"It is hard to see coke stocks pile up at coking plants, as both traders and mills are quite active in purchasing," said one source with a coking plant.

On September 30, the CCI assessments for Luliang and Tangshan Quasi Grade I metallurgical coke stood 50 yuan/t higher day on day at 1,560 yuan/t, ex-plant with VAT, and 1,760 yuan/t, DDP with VAT, respectively, and Rizhao Quasi Grade I Met coke increased 20 yuan/t to 1,800 yuan/t, FOB with VAT.

Despite strong demand, coke production enthusiasm diverged among producers, with some willing to scale up output amid bullish sentiment, while some others maintained certain production curbs in light of sustained negative margins and also increasing feed coal prices.

Offers for some coking coal grades increased by 30-50 yuan/t at some major producing areas, as miners confirmed smooth dispatches and received more pre-sold orders.

On September 30, the CCI index for Shanxi low-sulfur primary coking coal stood 31 yuan/t higher from last Friday at 1,709 yuan/t, ex-washplant with VAT, and that for mid- and high-sulfur primary coking coal stood at 1,450 yuan/t and 1,434 yuan/t, respectively, up 50 yuan/t and 48 yuan/t.

The stronger domestic market drove up trading liquidity of Mongolian coking coal at China's Ganqimaodu border port due to stirring inquiries from end-users. Mongolian 5# raw coal under long-term contracts was offered higher at 1,180-1,200 yuan/t, ex-stock Ganqimaodu with VAT. Traders stroke great deals even after price hikes.