"Unique Double Coke" Dancing Against The Wind To Set A New Record

      While the commodity market tends to be stable, the price of coking coal and coke is constantly refreshing the historical highest value. In the evening of August 25, the continuous contract of coking coal rose by more than 3% to 2618 yuan / ton, and the coke futures also reached a high of 3316 yuan / ton, setting a new record.

Driven by supply and market sentiment, the price of coking coal is rising; As an important downstream product of coking coal, the price of coke is also rising, but under the high price, the loss of coking enterprises is expanding.

At present, the overall supply and demand has no obvious signs of improvement, and the market will also place its hope on steel production restriction. Price rise will have a peak, once the downstream began to resist high price products, commodities will enter the channel of decline.

But now the profit level of steel enterprises is OK, and the fall of iron ore price has left enough space for the rise of coke price.

On the evening of August 25, the national development and Reform Commission announced that in order to speed up the release of advanced coal production capacity, after more than 20 open-pit coal mines obtained the land renewal approval last month, 16 more Ordos open-pit coal mines have received the land-use approval recently, involving a production capacity of about 25 million tons / year, and the open-pit coal mines with a production capacity of nearly 50 million tons / year will obtain the land use approval successively in mid September.

According to the national development and Reform Commission, after all the above-mentioned mines are in normal production, the monthly output can be increased by more than 7 million tons.

"Unique double focus" dancing against the wind

During the price rise of bulk commodities in the first half of the year, the overall rise of the black series was astonishing. Iron ore, steam coal, coking coal and coke all reached their historical highs in mid May. Since then, with the changes of global monetary policy, economic situation and market supply and demand, the rising tide of commodities has gradually cooled down.

Recently, iron ore has entered a downward trajectory due to the steel industry's production restriction, and the rise of steam coal is obviously insufficient. Due to the strong demand for power coal, it is still hovering at a historical high.

However, since the beginning of July, when the commodity market as a whole tends to be calm, the prices of coking coal and coke began to chase up strongly. At present, the price of coke and coking coal is still rising after the record high in May.

On August 25, domestic coking coal futures prices rose 3.31% to 2589 yuan / ton; This price level is 41.48% higher than the recent low on July 8, and has reached 112.47% compared with the same period last year. The price of coke futures was 3292 yuan / ton, up 3.08%; Compared with the recent low on July 8, this price level increased by 33.27%, and by 71.51% compared with the same period last year.

Domestic coke market prices also rose. According to the monitoring data of Lange Iron and steel cloud business platform, on August 25, the prices of quasi first grade metallurgical coke in Xingtai and Handan of Hebei Province were reported at 3330 yuan / ton and 3540 yuan / ton respectively, with daily increases of 120 yuan / ton; The price of secondary metallurgical coke in Shanxi Linfen, Heilongjiang Qitaihe and Shandong Linyi ranges from 3170 yuan / ton to 3310 yuan / ton, but the daily increase is 120 yuan / ton.

In the evening of August 25, the continuous contract of coking coal rose by more than 3% to 2618 yuan / ton, and the coke futures also reached a high of 3316 yuan / ton, setting a new record.

From the perspective of influencing factors, coke and coking coal price changes form a linkage, but their price rise logic is not quite the same.

Coking coal, also known as metallurgical coal and main coking coal, is a kind of bituminous coal with medium and low volatile matter; Coke is a kind of solid fuel, which is mainly used to smelt steel or other metals. Coking coal is the necessary raw material coal for coke smelting, and coking is one of the main uses of coking coal.

Since July, the production limit of downstream steel products of double coke has been implemented one after another. Under the situation of weakening demand, coke and coking coal still maintain a fierce growth trend, the core reason is that the supply shortage is difficult to be alleviated. In recent years, coal mine accidents occur frequently, coal production area supply recovery is not as expected, combined with the port Mongolia coal customs clearance blocked and other factors, coking coal supply has been in a tense state.

Under the shortage of coking coal supply, the supply of coke is in short supply; And the cost of coking coal keeps rising, driving the cost of coke to continue to rise. In addition, under the background of carbon peak carbon neutralization, due to environmental protection and import restrictions, coking industries in Shandong, Hebei, Shaanxi and other places began to limit and reduce production to varying degrees; Since the beginning of this year, the new coking capacity has been put into production at a slower speed, resulting in a significantly lower output than in previous years.

Supply shortage is hard to ease in the short term

Coke is an important raw material for steelmaking, and its rising price will inevitably push up the production cost of iron and steel enterprises. In the past month, the price of iron ore has dropped by more than 20%, but the price of coke has also increased by more than 20%. The rise of coke price has seriously overdrawn the cost reduction space brought by the fall of iron ore price.

However, at present, steel enterprises are still in a state of profit. In the later stage, with the implementation of the production restriction policy, iron ore prices will have more room for decline. As a result, steel enterprises still have high tolerance space for the rise of coke price. According to the survey of my iron and steel network, at present, the shipment of coking plant is still smooth, without suffering from sales resistance, and the downstream purchasing attitude is positive.

Wang Guoqing, director of Lange Iron and Steel Research Center, said that it is expected that coking coal import is difficult to be effectively improved in the short term, and the price of coke is likely to rise further, which will lead to the rise of steel production costs and the contraction of profit space.

At present, the production pressure of coking enterprises is relatively high, and it is difficult to replenish the raw coal. The situation of production restriction of coking enterprises tends to be strict, and the situation of shortage of coke supply may be further intensified. While the price of coke has been rising all the way, the cost pressure is also increasing, the steel plant procurement demand is not much, part of the coke enterprises have appeared losses.

At present, the intensity of coal mine safety inspection is not reduced, and the supply of imported coal is limited. Due to the repeated epidemic situation in Mongolia, there is still great uncertainty in the supply increment; However, the downstream demand is good, the coal mine inventory is still at a low level, coke steel enterprises are difficult to replenish the warehouse, mainly consumed inventory, and the recent inventory has been in a continuous decline trend.

It can be predicted that in the context of supply and demand imbalance, the cost of raw materials will continue to rise, and coke enterprises will continue to raise the price of coke, otherwise more enterprises will fall into losses. It is generally expected that there is still room for the coke market to rise in the later stage, and the double coke market will also maintain a strong operation.

In the second half of the year, China continued to promote the elimination of coking capacity, and at the same time, new production capacity was also in progress. Mysteel predicts that the net new coking capacity will be 29.605 million tons in 2021, and the overall capacity will be on the rise in the second half of the year.

However, the production capacity is not equal to the output. The shortage of coking coal will restrict the production of coking enterprises, and the shortage of some kinds of coal will increase the number of coke enterprises forced to reduce production.

An iron and steel industry employee pointed out to the 21st century economic reporter that the rise of coke price is unsustainable, but no one can tell when to withdraw.

From the upstream and downstream of the industry, there is bound to be a peak of cost rise. Once the increase of coke price exceeds the expected profit of the steel mill, the steel plant will have a psychological resistance to the high price coke, and even enter the maintenance stage in the fourth quarter ahead of schedule, which will promote the correction of coke price.

At present, the tolerance of steel enterprises to the cost rise is acceptable. However, the iron ore price has rebounded slowly from the trough in recent years, which tends to squeeze the profits of steel enterprises; If this trend continues, coke prices rise further, steel enterprises will no longer be able to sit still.