• Product
  • Supplier
  • Inquiry


    Home > Chemial News > Echemi Focus > Three major factors will affect the coke market in 2020

    Three major factors will affect the coke market in 2020

    Echemi 2019-12-10


    How will the domestic coke market trend be in 2020? The industry insiders believe that the coke market will generally stabilize in 2020, and prices will not fluctuate like in 2019. However, regional, staged, seasonal fluctuations, and oscillations still exist, but the frequency, duration, and area of the oscillations are different from 2019. Some factors affecting the trend of the coke market in 2020 are:


    The first is the change in supply. People in the industry believe that the rapid growth of output in the main coke production areas in China, the obstruction of exports, and the decline in profits of steel companies are the main reasons for the overall downward fluctuation of the coke market in 2019. In 2020, the supply of China's coke market will mainly depend on the implementation of outdated and ultra-low emission policies. According to the national "13th Five-Year Plan", the target for coke industry phase-out capacity from 2016 to 2020 is 50 million tons. As of the end of 2018, the coke industry has withdrawn from production capacity of 43.9 million tons, which has cumulatively achieved 87.8% of the "13th Five-Year Plan" target. The coking industry's goal of eliminating 50 million tons of outdated production capacity is likely to be completed ahead of schedule in 2019. However, as the replacement or new capacity is gradually completed and put into operation in the future, the overall coke production capacity may gradually rise, and the supply will also rebound. From 2019 to 2020, it will be a time for the centralized release of capacity. It is estimated that 27 million tons of capacity will be released intensively, which will have a greater impact on the supply of the coke market. It is expected that the domestic coke market supply will shift from tightness to oversupply again in 2020, and manufacturers' sales pressure will be difficult to ease, resulting in price fluctuations in the coke market.


    Second, the change in demand is related to the change in the degree of capacity release of steel companies. Hebei, Shandong, and Henan should increase the reduction of independent coking enterprises in accordance with the goal of achieving a ratio of coking capacity to steel capacity of about 0.4 by the end of December 2020. The Beijing-Tianjin-Hebei Plan pointed out that before the end of December 2019, Hebei Province completed the ultra-low emission transformation of the steel industry by 100 million tons, and Shanxi Province completed 15 million tons. At the same time, before the end of December 2019, Shanxi Province completed the ultra-low-emissions transformation of the steel industry by 15 million tons; by the end of March 2020, Shaanxi Province completed the ultra-low-emissions transformation of the 265 square meter sintering machine of Longmen Iron and Steel Company. As a result, another batch of steel production capacity will be withdrawn in the steel industry in 2020. If the crude steel output is controlled in 2020, the pig iron output should be controlled between 786 million tons and 795 million tons, a decrease of about 2%, which will affect the demand for coke.


    The third is the change in the domestic steel market in 2020. In 2020, China's economy is still facing downward pressure. It is expected that the consumption of crude steel will decrease by about 20 million tons compared with 2019, and the reduction will be concentrated in the real estate market. Due to the weak demand in the international market, it is difficult for China's steel exports to increase in 2020, and the pressure of oversupply in the domestic steel market has begun to appear. Therefore, the domestic steel market will not improve much in 2020, and the steel market may fluctuate downward. The steel market is weak and steel prices are falling. In order to alleviate cost pressures, coke procurement generally adopts the strategy of “controlling prices and controlling prices”, which will directly affect the trend of the coke market.


    Share to:
    Disclaimer: Echemi reserves the right of final explanation and revision for all the information.

    Scan the QR Code to Share

    Send Message