Why does Coke keep falling after the festival?

Since the general implementation of the reduction of 50 CNY/ton in the domestic coke market after the National Day holiday, the overall performance of the mainstream market in the near future has been stable, and the wait-and-see mood is relatively strong. However, on the 30th, some steel mills in the southwest region raised and lowered the coke price by 100 CNY/ton again, which is unacceptable to coke enterprises. Although it is difficult to reverse the decline, the price reduction range remains to be discussed. Recently, the price of double focus continued to weaken. Although there was positive news in the past few days, the price of double focus seemed to be in a downward trend. On October 28, the office of the safety committee of the State Council issued an urgent notice on Further Strengthening the work of coal mine safety production. We should deeply draw lessons from recent coal mine accidents and do a solid job in the current work of coal mine safety production.

In addition, a few days ago, market news said that Fuzhou and Guangzhou ports began to restrict the import of coal into China, and the tightening of coal import policy will also have a certain impact on coal supply. In theory, both of these two news should impact the coal supply side, but the weak operation of the double coke market has not improved significantly, and the futures market is also weak. Lei Wanqing, an analyst with Mysteel coal and coke, said that the import of coking coal is large this year, and the restriction policy is relatively loose compared with last year, so the overall role of this year's policy for coking coal has been weakened, and the support for coke is also weak. From the perspective of supply side, the impact of capacity removal, heating season and environmental protection on the production of coke enterprises is relatively limited, the implementation is not as expected, and the capacity utilization rate of coke enterprises has not declined significantly.

As of October 25, the capacity utilization rate of 230 independent coke enterprises counted by Mysteel was 74.01%, with a 1.07% decrease in the weekly to ring ratio, but an increase of 7.18% over the same period last month. In addition, there is no strong implementation of environmental protection policies, and the overall coke supply pressure is relatively high. There was no significant improvement in supply, but it was difficult to digest inventory. The inventory of coking plant continued to rise. The statistical data on October 25 was 514800 tons, up 53000 tons from the previous week. However, the coke inventory of ports and steel mills decreased slightly last week, but it was on the high side in general. According to the analysis at present, the coke port inventory is still high, while some southern steel mills have sufficient inventory, so the purchase intention of coke is not strong.

In terms of ports, most of the traders who mainly store goods are reluctant to ship at low price due to the high cost, while some of the traders who are combined for a long time in operation are greatly affected by the trend of futures, and the spot price is adjusted flexibly with the market and the frequency of price reduction is relatively fast. On the whole, the contradiction between supply and demand of coke market is prominent. On the one hand, coke enterprises have not seen production reduction, inventory digestion is difficult, and supply is sufficient; on the other hand, steel prices continue to decline in the early stage, and profits of steel enterprises are compressed. Yesterday, Tangshan area again issued environmental protection policies, and coke demand is limited. Therefore, it is expected that the price of Coke will still have downward space, and it may drop another 50 CNY/ton later.