Coke market is hard to stabilize

Under the influence of the seasonal off-season and the pessimistic expectation of the downstream steel plants, it is difficult to increase the demand for coke in the short term. However, if there is no de capacity, the supply pressure still exists in the context of limited production in the heating season. The decrease of speculative demand is due to the pessimistic expectation of steel mills after the National Day holiday, the control of inventory and the continuous accumulation of inventory in coke enterprises. From the perspective of regional inventory, North China, Northwest China and southwest China all have accumulated inventory.

However, the actual inventory of the steel plant decreased to 4.6 million tons, and the absolute inventory of northeast, North and East China declined to varying degrees. If the pessimistic mood of the steel plant can not be changed, and the autumn and winter environmental protection limit is coming gradually, the actual demand for coke in the later stage of the steel plant will be limited. At present, the coke inventory of the port is still at a high level of 4.49 million tons, with traders actively shipping, but the actual transaction is general. In addition, due to the weak external demand, there is an import inflow of coke. At the same time, the inflow of billets and hot coils further proves the weak external demand.

The trade driving is poor and the export driving continues to turn negative. The decline of speculative demand will still suppress the price of coke. With the simultaneous compression of the actual profit and the expected profit of the downstream steel, after the peak season of "golden nine silver ten", the expectation of the profit contraction of the black industry chain is further strengthened, and the feedback of the steel plant to the expectation is converted into the upstream squeeze profit. In terms of the actual profit of finished products, the screw steel is about 300 CNY/ton at present, and the hot coil is below 100 CNY/ton. The actual profit shrinks obviously, and there is a possibility of further compression.

According to the statistics of relevant organizations, the national coke profit is maintained at 98.84 CNY/ton. In the early stage, it mainly depends on the profit after the cost of coking coal end is moved down. With the recent exploration of coke price again, the daily steel price was reduced by 50 CNY/ton again at the end of last week, and the profit may be compressed again. From the perspective of the profit distribution of the industrial chain, the pessimistic expectation of steel mills that the coming of the low season will continue to suppress the burden. After the national day, the utilization rate of coking capacity rose again, and the supply pressure continued. From the historical experience, even if the later heating season comes, as long as coking keeps a small profit, the expectation of strict production restriction is still low, so the supply pressure of coke can not be alleviated by active production restriction in the short term.

Since the supply pressure cannot be relieved by the active production restriction, the passive capacity reduction may be the only way to control the coking supply at present. In August, Shanxi issued a document requiring that the total coking capacity of the whole province be reduced to within 147.68 million tons, and on this basis, the built-up capacity be kept unchanged; by 2022, the proportion of advanced capacity will reach 60%; and the excess capacity be reduced by 40 million tons. However, from the perspective of reality, there are still variables in Shanxi's capacity de production, including "opening new capacity or closing old capacity", "controlling capacity at 147 million tons, increasing actual capacity instead of reducing" and "transferring zombie capacity to production capacity".

In addition, according to the capacity optimization document of Shandong region, it is estimated that about 10 million tons of production capacity will be removed in the later stage, which is the province most likely to affect the coke supply pattern, but replacement capacity and execution time of capacity removal need to be considered. From the perspective of raw material end, the current supply of coking coal is relatively sufficient. As of October 18, the total coking coal inventory of the independent coking plant is 8012400 tons, which is at a high level in the same period of the past three years. At the same time, the inventory of the four ports of Jingtang, Qingdao, Rizhao and Lianyun has gone up all the way since the beginning of the year, reaching 6.945 million tons, a year-on-year increase of 58.4%, the highest level since 2014. In the medium term, there is still room for price reduction.