Coke boosts sentiment, coke steel game into the final stage!

With the increase of bidding willingness of coking enterprises, the willingness of some enterprises to increase gradually increases. As of this week, the voice of coking enterprises across the country has been rising and falling. Shanxi, Hebei, Inner Mongolia, Shandong and other major producers generally raised coke prices by 100 yuan per ton. However, because the coke inventory level of downstream steel plants is still in the middle and high position, there is no response to the increase in coke prices for the time being, and coke steel enterprises enter a game period.

This week's coke price rise has a strong market base. Some coke enterprises in Shandong have dramatically limited their production by 50%, which makes Shandong Steel Works worried about the growth of coke supply. Due to the influence of the "100-day Zero-Clearing Action" and the "Second Youth League" in Shanxi, the work of environmental protection and production restriction in various cities has gradually become stricter. In addition, due to special reasons, coking enterprises in Xuzhou, Jiangsu Province also have sudden production restrictions. The tightening of coke at the supply side makes the market play an important role in the change of coke price, and the increase in coke price also lies in the fact that the profit level of coke enterprises is squeezed downstream in the early stage. Coking enterprises maintain profit margins of about 30-100 CNY/ton. The possibility of further decline is very small, and the rebound strength will be greater when the market supply and demand change to a certain extent.

From the long-term planning of the country, China plans to make greater efforts to regulate the shutdown and production restriction of high-energy-consuming industries more accurately. It is reported that the relevant departments are planning to carry out graded performance evaluation and differentiated management in 15 key industries, such as iron and steel, coal, cement, chemical industry and so on. Through the production technology level, management technology and other indicators to develop performance rating rules, the industry enterprises are divided into A, B, C levels, in Beijing, Tianjin and Hebei, the Yangtze River Delta region, Fenwei Plain and other key environmental protection areas, according to different weather conditions, according to the level of production stops and restrictions. "Out of the 31 industries that are under the key control of environmental protection, 15 industries will be graded and differentiated." According to people familiar with the situation, enterprises in energy-intensive industries in key areas of environmental protection will start early warning of emergency emission reduction while adopting staggered peak production in heating season and implementing phased production restriction. Emergency response should be taken in heavily polluted weather to minimize pollutant emissions.

But it should also be noted that the increase of coke is also facing certain market pressures. From the point of view of steel mills, the demand for coke has not substantially increased. In the case of BF production restriction, steel mills still focus on the elimination of their own inventory, and new procurement needs still need time. From the point of view of the profit level of the steel mill itself, most of the profits of the steel mill this year are inclined to iron ore raw materials, which also increases the willingness of the steel mill to crack down on coke.

According to statistics, the social stock of steel continues to accumulate this week, and the seasonal characteristics of steel consumption in off-season are continuing, so steel mills are still more resistant to accepting the price increase of raw materials. If the coke supply is not substantially tightened, the steel mill's acceptance of price increases will also be a local phenomenon.

Therefore, whether the coke price can be raised successfully or not depends more on whether the coking plant can achieve its output reduction target, otherwise the coke steel game will persist in July and August.