Tension between China's metallurgical coke and steel producers intensified, as the former pushed for higher selling prices while the latter showed resistance in light of weak steelmaking margins and tepid end-user demand.

Some participants anticipated the second price hike, which had been delayed once post-holiday, to be ultimately implemented, considering localized supply contraction and robust raw material cost support.

Trading on the futures market extended gains from the previous day's rally, reflecting a moderate improvement in market sentiment.

On October 17, the most active met coke futures contract for January 2026 delivery on the Dalian Commodity Exchange ended the daytime session 1.64% higher than a day ago at 1,676.0 yuan/t ($235/t), marking a rise for the fourth straight trading day.

The most-traded coking coal and steel rebar futures also registered growths of 1.46% and 0.03% day on day, respectively.

Overall coke supply retreated slightly in the main producing regions. While most coking plants kept operations stable, several reduced production for facility maintenance or due to environmental inspections.

Over the week ending October 15, the average capacity utilization among Sxcoal-surveyed coke enterprises fell 0.26 percentage point from the previous week to 74.85%.

Meanwhile, rises in feed coal prices provided increasing cost support to the coke market. In Linfen of southern Shanxi, coking coal prices moved upward amid warmer sentiment and active sales, Sxcoal understood.

Xiangning low-sulfur lean coal (S 0.5%, A 10%, GRI 70) was up 30 yuan/t to 1,450 yuan/t, ex-washplant with VAT and on banker's draft, effective October 17, with additional volume-based discounts ranging 10-30 yuan/t. Low-sulfur primary coking coal sites (S 0.4%, A 10%, GRI 80) increased 30 yuan/t to 1,460 yuan/t, ex-washplant with VAT and in cash.

In Anze of Linfen, prices of some low-sulfur primary coking coal (S 0.5%, GRI 80-85) rose 20 yuan/t to 1,560 yuan/t, ex-washplant with VAT and in cash, Sxcoal learned.

In Hejin of Yuncheng, South Shanxi, one large coal mine lifted prices of low-sulfur washed lean coal (S 0.5%, A 10%, GRI 60) by 30 yuan/t to 1,410 yuan/t ex-washplant with VAT and on banker's draft, while lean raw coal rose 20 yuan/t to 945 yuan/t, effective October 17.

Coke consumption at steel mills remained strong as molten iron output stayed elevated at over 2.4 million tonnes despite a slight decline. Steelmakers, however, encountered growing pressure from weak steel prices and limited profits.

Some mills, particularly those with structurally low inventories, expressed stronger restocking interest and began expediting deliveries for certain coke grades due to a structural shortage. In contrast, others maintained a cautious, as-needed procurement strategy.

"Our coke stockpiles were enough to cover one and a half months of usage," said a steelmaker source in southern China, indicating that unless finished steel prices rebound notably, the potential coke price rally may only sustain one or two rounds.

"Accepting coke price increases won't be easy, and we might resist for a while. Yet it will probably materialize next week," noted a Shanxi-based steelmaker source.

Participants will closely monitor the rate of steel inventory drawdown, steel product price change, and policy signals that may emerge from an upcoming political meeting in late October.