Coke prices will generally stabilize in 2020

2019 is coming to an end. This year, the coke market as a whole fluctuated downward, rebounding from the bottom in mid-November, but there were no obvious signs of stabilization and recovery. It is understood that from mid to late November, the coke market prices in some areas of the country have continued to fluctuate. Taking the week of November 16-23 as an example, the price of coke in the Yunnan-Guizhou area fell by 80 CNY/ton, and a few representative steel mills in Shanxi and Handan Steel Plant proposed a price reduction of 50 CNY/ton to coke enterprises. A letter was sent to notify the steel mills to raise the ex-factory price of coke by 50 CNY/ton, but after many days of game, prices in most regions are still mainly stable.

Four factors cause the coke market to fall in an oscillating downward manner

On January 2nd, the coke market started off with a downward trend. On the same day, the price of Tangshan secondary metallurgical coke was 2,065 CNY/ton, down by 50 CNY/ton; the ex-factory tax price of Heilongjiang Qitaihe secondary metallurgical coke was 2,070 CNY/ton, down by 100 CNY/ton. The coke market has a bad start because the coke inventory of steel mills has increased, the willingness to replenish stocks has not been strong, and the demand for coke has decreased. Coking enterprises accepted the price reduction of coke, and traders experienced parity and price reduction.

The coke market entered an oscillating downward channel, and the pricing of coke prices in the coke industry decreased by 200 CNY/ton. Coke enterprises have a higher operating rate. Coking enterprises in Xuzhou, Shaanxi and other places in Jiangsu have gradually increased their production. The coke inventory of steel enterprises is at a high level, and their willingness to suppress raw material prices has increased. Intermediaries are not optimistic about the market outlook, and coke purchases continue to shrink. Crude steel and pig iron output are decreasing, while coke output is increasing. This "one minus one increase" caused coke supply to exceed demand, which led to a year-on-year fluctuation in coke market prices.

From late April to May, the coke market gradually got rid of the continuously weak and sluggish operating situation, stopped falling, rebounded, and fluctuated upward. On April 28, domestic coke market prices generally rose. Coking enterprises in Shanxi, Inner Mongolia, Shandong, Hebei and other places have successively raised the sales price of coke, and most steel mills have accepted it, which has led to a general increase in spot prices in the coke market.

However, from mid to late June to July, the coke market price began to fall again. The monthly pricing of the central and southern regions represents that the price of coke car plates in July has been reduced by 140 CNY/ton; the southwest region has reduced the price of coke by 50 CNY/ton in the first half of July. By the middle of July, after the continuous decline in the price of coke, the profits of coking enterprises were continuously compressed, close to the break-even point, and a small number of coke enterprises lost money. After that, the prices of some coke companies slightly increased for traders, and the price of coke stopped falling and stabilized.

At the end of July and early August, the domestic coke market prices rose steadily, and the first round of price increases came to an end, and the second round increased by 100 CNY/ton. However, during this period, the domestic steel market continued to weaken, and steel mill profits have shrunk sharply, unable to support the price increase requirements of coke companies. At the end of August and early September, the coke market price continued to fall. Among them, the price of coke in East China, North China and Northeast China generally fell by 100 CNY/ton, and since the price reduction at the end of August, the total price has fallen by 200 CNY/ton. This weakness and downturn in the coke market continued into November. During the week of November 1st to November 8th, domestic coke prices fell by 50 CNY/ton to 100 CNY/ton.