Down space of coke and coking coal is limited in short term, medium and long-term may maintain weak

In the first week after the end of the Spring Festival holiday (January 30 — February 3, the same below), the black metal plate as a whole showed a weak trend of shock operation, in which the weekly decline of coke was 4.57%, the weekly decline of coking coal was 3.92%. From the daily K chart of the main continuous contract, the “dual focus” price is still in the medium-term operation range: coke in the rebound market in January, the price is approaching the upper limit of the range (2400 yuan/ton ~ 3000 yuan/ton), and then the shock fell; Coking coal rebound range is lower than coke, the current price has fallen to the range (1750 yuan/ton ~ 2250 yuan/ton) near the lower limit.

In stock market, coke price in producing area stabilized in main, port trade price was slightly down to follow the plate. Coking coal spot market trading atmosphere improved, but some coal performance was still in weak trend.

From the running logic point of view, black metal plate collectively went back. On one hand, since November 2022, stimulated by strong expectations, the price of various futures has increased significantly, including rebar steel, “double coke” and so on up to more than 20%, iron ore up to more than 40%, which means there is a technical correction demand; On the other hand, with the end of the Spring Festival holiday, traders were back to work one after another, but the downstream construction units resumed work relatively later, so the “strong expectation” is difficult to be fulfilled in a relatively short time, the wait-and-see sentiment of the market is rising, and the black metal plate price is insufficient to rise further, leading to the volatility of the futures price correction. From the futures of their own situation, due to the early rise of iron ore, the relevant departments are studying to strengthen the iron ore price supervision. As a result, the bullish sentiment in the market has cooled down. At the same time, due to the strong financial attribute of iron ore, its high price fall will have a certain impact on the prices of other futures. In terms of “dual coke”, coke itself runs relatively smoothly and lacks hot speculation, which is more affected by the expected changes in the strength of coking coal at the cost end. This round of price decline is impacted by the expected increase in imported coal, mainly including Mongolia’s coal daily clearance volume to hit a new high in recent years, Australia’s coal import resumption, etc. The expected increase in supply leads to a decline in coking coal price, and then drive the coke futures price to weaken.

From the perspective of “dual coke” fundamentals, both ends of coke supply and demand remain stable and have an increasing trend, and the overall inventory tends to decline. At the coking coal end, domestic coal mines who were halted production due to the Spring Festival holiday have resumed production, while the coking coal import trend is improving, coking coal supply is expected to increase, and the coking cost of coking enterprises has loosened.

Specifically, in terms of coking profit, recently the price of coke is mainly stable, the cost of coking is affected by the expected increase in supply, the cost is slightly loose, but there is a loss of nearly 90 yuan per ton of coke. Under the current situation of loss, the overall production of coke enterprises is relatively stable, and the willingness to increase production is not strong for the time being. Last week (January 30 — February 3), the survey data showed that the average daily output of independent coke enterprises in China slightly increased to 664,000 tons. As coking production capacity has been restored to a relatively sufficient state in recent years, the bargaining power of the coking link in the industrial chain has declined, and it is difficult to obtain a profit space of more than 300 yuan per ton of coke. However, in the short term, it is about to start construction in the spring. Considering the low coke inventory at the end of downstream steel mills, there is a certain expectation of replenishment. Coke price is likely to rise at this stage, so as to alleviate its own loss pressure.

In terms of demand, the annual output of crude steel and pig iron in 2022 has again decreased year-on-year, and the task of production control has been completed. There is no clear conclusion on whether to continue to implement the policy of crude steel production control this year, which needs continuous attention. From the perspective of the performance of the terminal market, under the background that the general tone of “no speculation in housing and housing” remains unchanged, the real estate policy is generally warm since 2022, but the performance of the real estate data is still poor, forming a continuous game between “strong expectation” and “weak reality”. At present, this kind of game still exists, and the time is approaching the key stage of expected fulfillment again, and we need to pay attention to the start of the terminal market in the later stage. From the point of view of the rigid demand for coke, recently the blast furnace operating rate of steel mills remained stable with an increasing trend, and the average daily output of molten iron increased to about 2.27 million tons. In addition, according to the investigation of relevant institutions, 25 blast furnaces are scheduled to resume production in February, involving a capacity of about 94,000 tons per day; Five blast furnaces are scheduled to be shut down for maintenance, with a production capacity of about 16,000 tons/day. If production is carried out according to this plan and combined with the profit change expectation of steel mills, the average daily molten iron output in February is expected to be 2.29 million tons, which means there is room for continuous increase in coke demand.

In terms of coking coal, domestic coal mines have resumed work and production. In the first week after the holiday, the daily output of coking cleaned coal in coal washing plants has recovered to 580,000 tons, an increase of 80,000 tons from the low point. It is understood. In the second week after the Spring Festival, coal mine end production is concentrated, so the domestic coking coal supply will maintain a steady increase trend. In terms of imports, China imported 63.838,400 tons of coking coal in 2022, up 16.7 percent year on year, data from the General Administration of Customs showed. The expected increase of imported coal in 2023 is still strong, which is also the key influencing factor for the weak performance of coking coal. From the recent data, this January due to holiday factors, Mongolia’s overall coal clearance volume was lower than last December. However, after the Spring Festival holiday, the customs clearance volume has recovered to the best level in recent years, and the customs clearance volume of Ganqimaodu port even exceeded 1,000 vehicles per day, which has significantly exceeded the level of the same period in 2019. In addition, news of the resumption of coal trade between China and Australia has roiled markets since December. The latest situation shows that the resumption of coal trade is basically confirmed. Domestic enterprises have purchased coal from Australia, and the first ship of Australian coking coal has recently arrived at domestic ports. On February 6, commerce ministers of China and Australia held a video meeting. The warming of economic and trade relations between the two countries will help Australian coal flow into China and make up for the shortage of domestic high-quality main coking coal. If Australia’s coal import can recover to the magnitude before the ban (more than 30 million tons), it will have a certain impact on the domestic and even international coking coal trade situation, which needs to be continued attention in the later stage.

Generally speaking, the game of “strong expectation” and “weak reality” is still the dominant factor of the “dual focus” market, and the time is approaching the expected realization stage, the market wait-and-see sentiment is heating up, we need to pay attention to the rhythm of control. On the basic level of “dual coke”, the overall situation of coal, coke and steel three links shows a steady trend of increase, “dual coke” inventory remains low; In the short term, “strong expectations” can not be falsified, coupled with the increase in rigid demand, “dual focus” prices after the correction to continue to decline space or limited; However, under the impact of the expected increase of imported coal, the medium – and long-term performance of coking coal or weaker than other varieties, thus dragging down the trend of coke prices.