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Why didn’t China’s strong steel production benefit domestic coal miners?

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29 September 2020

Why didn’t China’s strong steel production benefit domestic coal miners?

Report summary

After coronavirus was largely contained early in the country, China’s economy has seen major recovery. GDP year-on-year growth reverted from -6.8% in Q1 to 3.2% in Q2. Thanks to government stimulus measures, especially special-purpose bonds focusing on infrastructure construction and manufacturing, crude steel production has remained robust, registering 3.7% year-on-year growth in the first nine months. But despite the positive conditions, domestic coking coal prices have remained on a downward path. Read our insight to find out why resuming production so quickly in Q1 didn’t do domestic coal miners any favours in the ensuing months and what Q4 has in store for them.

Table of contents

  • Steel production barely hurt in Q1 and recovered quickly since then
  • but robust production doesn’t equal better margins
  • but the cokemaking margin has been higher year-on-year, why?
  • What happened to the coking coal price?
  • Will the situation improve in the rest of 2020?

Tables and charts

This report includes 9 images and tables including:

  • Crude steel and coke production
  • BF utilisation rate of key steel mills
  • Rebar inventory
  • Rebar prices in Hangzhou (25mm, HRB400)
  • Coke prices of quasi grade I in Tangshan
  • Anze low-sulphur premium coking coal price
  • Huozhou high-sulphur fat coal price
  • Mine coking coal inventory
  • Seaborne and landborne coking coal imports

What's included

This report contains:

  • Document

    Why didn’t China’s strong steel production benefit domestic coal miners?

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