The double support of policy demand for coke market may usher in a new inflection point
In the afternoon, a news came out about a steel mill in Shanxi Province that lowered the price of coke by 50 yuan per ton. Then, the rumor was refuted, and the steel mill did not raise the price. The market was in an uproar. In a short time of more than a month, coke spot has achieved four consecutive drops, a total of 200 yuan/ton. The profit of the coking plant has been greatly reduced from 200 yuan/ton to 20 yuan/ton at present. The coking plant is pessimistic and starts to support the price sales. Recently steel mill demand gradually recover, suspend the pressure on the coke price; In recent days, shanxi, jiangsu and shandong provinces introduced the policy of cutting production capacity, and the price of coke may stop falling.
After the festival, due to the epidemic, steel products inventory overstocked, steel prices fell sharply, steel losses tight funds, and transportation caused by the shortage of raw materials and accessories, steel blast furnace began centralized maintenance. According to the number of blast furnaces started in zhonglian steel, about 81% of the blast furnaces started in mid-to-late February, 5.5 percentage points lower than the 86.5% started before the Spring Festival. The start of blast furnace in tangshan steel plant decreased to 63% from 75.52% before the festival. The extensive overhaul of steel mills has resulted in a sharp decline in the demand for coke. Steel mills began to reduce prices to reduce the purchase of coke, coke at the end of February to open a decline channel.
After the festival, due to the delay in transportation and the resumption of coal production, the coking plant was in short supply of raw materials, and the production was restricted to a certain extent. With the resumption of coal work, the coking plant started to increase to a normal level. According to the survey data of zhonglian steel co., the coking plant started about 65.9% after the holiday, down 9.6 percentage points from 75.5% before the holiday, and increased to 72.8% in late February. Coke supply gradually increased, coke plant coke inventory increased significantly. At the end of February, the average profit of the coking plant was about 110 yuan/ton. Although the coke price has declined, the profit of the coking plant is still ok. The coking plant has not declined since it started. The overall supply has shown an increasing trend and the price has been falling all the way. After four rounds of reduction, the average profit of coke shrank to about 20 yuan/ton, and some local coking plants suffered losses.
Recently to policy increased production capacity: about "the Shanxi Province won the blue sky battle battle plan 2020", taiyuan, linfen, changzhi city, in accordance with the approved reduce program exit and coke oven chamber height 4.3 meters, jinzhong, luliang, yuncheng, xinzhou, yangquan belong to "1 + 30" area of the county (city, area) to all withdrew from the chamber height 4.3 meters, and the coke oven. Before the heating season in 2020, the province will shut down and phase out the reduction and coking production capacity of more than 20 million tons. Xuzhou issued the 2020 coke enterprise integration and exit plan, the coking industry in the city's 11 coking enterprises, the optimization and integration of three comprehensive coking enterprises, by 2020 to reduce the coking capacity by 50%. After June 2020, the coking capacity of 6.8 million tons will be withdrawn, and the replacement capacity will be increased by 2.6 million tons simultaneously. According to the task requirements, three coking enterprises in shandong province withdrew 1.8 million tons of production capacity in March, and six coking enterprises withdrew 4.3 million tons of production capacity in April.
From the point of time to cut capacity and the state of coking plants, the cut capacity in jiangsu and shandong has a certain impact on the market. In April, the supply of coke and the demand for coking coal may decrease to some extent. Positive support for coke to stop falling and stabilize and even rebound.
Current steel price shock adjustment, steel mills maintain more than 300 yuan/ton profit, individual enterprises appear 500 yuan/ton profit. Later steel prices are still relatively optimistic, and with the improvement of the epidemic, the downstream end of the resumption of work, steel mills have a plan to gradually increase the start of the blast furnace, coke demand has been released. Combined with the current steel mill profit recovery, coking plant profit margins, steel mills to postpone the price of coke pressure.
To sum up, under the favorable support of the introduction of policies to reduce production capacity in various regions, the purchase demand for coke from downstream steel mills has gradually increased, and the favorable support stops the decline in coke price. As the coke supply is still relatively loose at present, it may still take some time for the coke price to rebound. In the process of stable operation of the supply and demand sides, the coke plant will maintain the current production and the supply will maintain stable operation. Steel mills gradually upgrade the blast furnace, the increase in coke procurement, the change in supply and demand may be able to lead the coke rebound.
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