Bi-coke divergence: coke is trying to rise, coke pressure is high

After entering September, the trend of the double coke market has been seriously divided. The coke market tried to rise in the first round, but the coke coal market continued to be under pressure and prices continued to decline, so there is no hope of improvement. From September 17, 2019, Hebei Mainstream Coking Plant began to try to raise coke price by 100 CNY/ton in the first round. With the opening of the first round of increase in Hebei mainstream coke enterprises, the spot price of coke has officially reached the bottom. But a round of price rises and falls still takes time.

Since September 17, after the main coke enterprises in Hebei, Pengfei Coking Company in Shanxi and Coking Plant in Xuzhou District have tried to raise coke prices by 100 CNY/ton in the first round, other coking plants have not followed up the increase at present, and steel plants have not accepted the increase, mainly because Coke stocks in steel plants are still relatively sufficient, so a round of increase is followed up. It still takes time to suffer. However, the coke price in Xuzhou has been partially increased. Because of the environmental impact, the output of coke enterprises in Xuzhou is limited. The local coke enterprises have low inventory, sufficient orders and TRADERS'inquiries. The transaction price of some quasi-wet-out land sales steel plants has increased by 50 CNY/ton. Overall, it will take some time for coke spot price hikes to fully fall. It is expected that the spot rebound of Coke will last about 1-2 rounds. Since September, the whole coking coal market in China has been under great pressure, mainly due to the continued shrinkage of demand. Affected by this, coking coal prices in Shanxi, Shandong, Inner Mongolia and imports have fallen by a large margin, and in some areas the monthly decline has exceeded 100 CNY/ton. Overall, the downturn of the coking coal market, whether high-quality coking coal or blended coking coal and high-sulfur coking coal, the overall pressure of the market spread widely and lasted for a long time. After the supply-side structure reform in 2016, the situation of the coking coal market was the most severe one. In Shanxi, the market demand for high-quality coking coal, high-sulfur coking coal and blended coking coal in September was generally weak, and the price generally declined, with a decline of about 30-50 CNY/ton. After that, the tax of low-sulfur main coking coal from Luliang area of Shanxi Province was about 1530 CNY/ton, and that of high-quality fertilizer coal was about 1550 CNY/ton.

In Inner Mongolia, affected by the falling demand and the resumption of production, the coking coal market in Wuhai region of Inner Mongolia has been reduced by 50-60 CNY/ton since the beginning of September, and 1/3 of the coking coal has been reduced by S1, A10, V27-32, G80 and Y17. In addition, the price of imported Mongolian coking coal has also been lowered, and after the reduction, the duty of Mongolian No.5 concentrate in Ganqimaodu region has been increased by 118 CNY/ton. 0 CNY/ton.

After September, the price of clean coal in Shandong local coal mines has continued to decline, with a cumulative decline of more than 100 CNY/ton, but the main coal enterprises have dropped by 60-70 CNY/ton, which has stabilized their operation. At present, there is a tax of 950 yuan per ton for gas concentrate and 1250 yuan per ton for 1/3 coke coal in Zaozhuang area in Jining area, Shandong Province. Although Shandong's clean coal market has fallen considerably, its role in boosting the market is limited, and the inventory pressure of coal enterprises is still large.

On the import side, as of September 17, the CIF price of China, the main focus of Prussian First Line, was 160 US dollars/ton, with a sharp decline of 8 US dollars per annum, reaching its lowest level in nearly two years. This is mainly due to the high stock of Imported Coking Coal in the port, the sufficient supply, and the continuing slump in domestic demand, resulting in a significant decline in Imported Coking coal. Overall, the weakness of coking coal market in the later period will continue. From now on to the end of the year, the situation of coking coal market is not very optimistic, and the price still has downward space. First, on the supply side, although the security inspection of coal mines will be strengthened near the 70th anniversary of the founding of the People's Republic of China, it has limited impact on coal mine output, most coal mine production remains normal, and the supply side has not significantly reduced. Secondly, on the demand side, the shrinkage of coking coal market from the demand side is very obvious. On the one hand, it is related to the increasing capacity of coking to remove production, on the other hand, it is related to the low profit level of coking plant in steel plant and the constant attempt to suppress the price of coking coal.

In the later period, after enjoying the dividend of the three-year supply-side structure reform, the contradiction between supply and demand in the coking coal market began to highlight from the fourth quarter of this year, and the contradiction between supply and demand in the coking coal market began to highlight, and the price focus will continue to decline in the future.