Is there any room for coke price to fall?

Port coal price kept rising slightly this week, and the production market was stable and weak. From the perspective of the main producing area market, after the coal price in Yulin of Shaanxi Province has been reduced in the early stage of this week, there is still no significant improvement in sales, no significant increase in the railway freight volume of large mines, and a slight decline in the price weakness; the sales of high truck coal in Ordos area is generally, there is still pressure on inventory, and the coal price this week has not changed much. The demand in the north of Shanxi Province is general, and the coal price is mainly stable. On the port side, due to the impact of the upgrading of the import coal restriction policy this week, the downstream inquiry increased, and the coal price kept a small increase trend. Up to now, according to the guidance price of Fengkuang power coal, the main quotation of 5500 kcal is mainly about 554 CNY/ton, and the main quotation of 5000 kcal is mostly about 487 CNY/ton.

From the perspective of downstream demand, the market has improved in the near future, largely affected by the news of import coal restrictions. With the subsequent comprehensive start of heating in the north and the advent of cold air, the weather in most parts of the country will turn cold, and the power load will be further improved. However, due to the high inventory of power plants and weak enthusiasm for replenishment, it is difficult for coal prices to rise substantially, and the subsequent coal prices are expected to show a small fluctuation trend. This week's coke price is mainly stable. After two rounds of decline, coke enterprises still have a profit of about 50 CNY/ton (Shanxi region). The market is still in a situation of supply exceeding demand. However, compared with last week's situation, the supply and demand situation has improved. Coke enterprises are actively selling, inventory is down, and steel enterprises' inventory is slightly up. As of No. 15, the price of first-class metallurgical coke in Linfen, Shanxi Province is 1750 CNY/ton; that of quasi first-class metallurgical coke in Tangshan, Hebei Province is 1810 CNY/ton; that of quasi first-class metallurgical coke in Rizhao port is 1730 CNY/ton.

Although the price of Coke tends to be stable, the market sentiment is still relatively pessimistic. Inventory and supply and demand are the reasons for the weak mentality of coke enterprises. The limited import of coal has not relieved the pressure of coke enterprises. At present, both coke and steel are in the stage of environmental protection and production restriction in autumn and winter. The degree of production restriction of both sides will directly lead to the change of supply and demand. At this time, the supply is slightly loose. Is it still the case next week? It's hard to say that based on the current environmental protection trend estimation, the coke market is expected to be weak and stable next week. The coking coal market is under pressure this week. From the perspective of the price performance of coking coal in the main domestic production area, after several previous reductions, the majority of coking coal prices are stable this week. At present, the supply and demand pattern of coking coal market is still mismatched, and the demand for coking coal is weak under the environmental protection and production restriction of downstream steel plants and coking enterprises in the heating season; however, the inventory of domestic coking coal mines continues to rise, and the imported coking coal resources at ports and ports are sufficient, the domestic coking coal sales are not smooth, and the pressure continues to be exerted, and some mines are still in downward adjustment.

From the perspective of imported coal market, the long-term market trend of imported Australian coal is different from that of domestic port spot market. Among them, the forward market transaction price rose slightly around $2-3 on the 13th, while the port spot price continued to decline. The main reason is that the recent high price transactions focus on the goods shipped in the late December. Considering the low risk of goods customs clearance in the late December, Chinese buyers in the Chinese market also consider that Australian coal still has a significant price advantage over domestic coking coal of the same quality in the long term. Recently, the raw coal inventory of Mongolia port is high, and port traders are bidding at low prices. At present, the tax price of No. 5 raw coal site is 860-880 CNY/ton, which is about 120 CNY/ton lower than that of the previous period. The actual transaction price of clean coal at the port is also reduced, but the reduction is less than that of raw coal.

The price of clean coal at the port is 1030-1060 CNY/ton. From the basic point of view, the fixed pattern of strong supply and weak demand, coking coal pressure is still under pressure, but the recent market focus is on the tightening of imported coal, and the second is the 2020 senior co pricing meeting of major coking coal mines next week. Although the tightening of imported coal supports the domestic market, it is expected that the strength of support is very limited; and the long-term cooperative pricing of coking coal mines in the next week will become the catalyst of market sentiment under the downward trend of coking coal market, if the long-term cooperative pricing is successful, the market price sentiment will gradually rise; if the long-term cooperative price is lowered, the pessimistic low mood will accelerate the reduction of coking coal price. Therefore, we need to focus on the recent implementation of import coal customs clearance and the pricing of the long-term association of large mines.