the production cut in CS chip gradually burdened down CPL market

Second, the production cut in CS chip gradually burdened down CPL market. Since October, CPL RMB spot has been dropping continuously. Though it is triggered by the slump in coal price, CPL new capacity and limited downstream production and demand also attribute to the price decline. During this period, CS chip plants have gained more power in the price negotiation and they have seized the opportunity to drag down CPL prices.

After CS chip margin reached high level in the beginning of December, most downstream buyers have considered that the lucrative profit in CS chip is not sustainable according to previous experience. However, the firmness in CS chip market is beyond expectation, as when CPL spot dropped to 13,100yuan/mt in early December, CS chip prices rebounded after a short-lived decline to 14,400yuan/mt, to 14,900yuan/mt and higher again. Chip-CPL spread maintains high at 1,350-1,450yuan/mt (actual spread at around 1,500yuan/mt). There comes the final question: is the lucrative profit of CS chip sustainable? When will it fall?