Coke deficit to worsen in Russia

Russian coke market still shows a considerable imbalance due to problems in coking coals segment. According to Metal Expert's estimates, coal deficit caused by accidents at mines and a shortage of Russian Railways' rolling-stock will be preserved till the end of Q3. It is expected that Yuzhkuzbassugol will put back into operation Ulyanovskaya and Yubileynaya mines (2.1 and 1.3 mtpy, correspondingly) no sooner than in September. Considering stable coke consumption, a shortage of available coal entails a drop in production at coking plants.
Moreover, the consumption of blast furnace coke is to increase in September-October, as a number of blast furnaces resume operations after repairs (2.34 Mtpy BF №1 at ZSMK, 175,000 tpy BF №3 at Serov Steel Works). At high export demand for Russian coke (in H1 shipments increased by 187% or 1.8 Mt y-o-y) which will be seen in H2, we expect the coke market rebalancing to happen not earlier than in mid-Q4.

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