Due to the elimination of outdated production capacity in the coking industry in Shandong and Shanxi provinces and the low coke inventory in each link, the spot price has increased by 300 yuan/ton for six consecutive rounds since the end of August, laying the foundation for a strong upward trend in coke prices. At present, the pattern of tight coke supply still exists, and there may be 1-2 rounds of opportunities for spot price increases. The long-term pattern of futures prices has not yet ended. Considering that the 2101 contract has increased by more than 500 yuan/ton in the past month, the spot price has been premium, the profit of coking is high, the profit of steel mills is low, and the coal-to-coke ratio is as high as 1.8:1. , Try to adjust the game stage every soaring.

coke supply

1. The fourth quarter is mainly to complete the task of reducing capacity

Since the end of 2019, Shandong and Jiangsu have implemented the elimination of nearly 21 million tons of production capacity. The new production capacity has been put into production slowly, and the domestic coke production capacity has been reduced by nearly 10 million tons. As a result, the coke supply is gradually tightening this year. . In October, the task of reducing capacity in Shanxi was more concentrated. The task of reducing capacity in Taiyuan Coking was 9.6 million tons, Linfen 5.44 million tons, Lvliang Xiaoyi 1.2 million tons, Yuncheng Hejin 2.4 million tons, Changzhi 3.52 million tons, a total of 22.16 million tons, but at the end of October At the time limit, there are still 23 coke enterprises in Shanxi with a total of 14.32 million tons waiting to be shut down. At present, Shandong, Shanxi, and Henan have not yet completed the capacity reduction task. It is expected that there is still room for reduction in coke production capacity in November and December. Without a significant decline in coke demand, it will lead to more coke prices.

2. Coke inventory drops to a historically low area

From the perspective of inventory, as of the week of November 6, the coke factory inventory was reported at 254,200 tons, which was a sharp drop of 778,300 tons from the stage high of 1.0325 million tons in the week of February 7, indicating that the coke enterprises shipped smoothly. , Downstream consumption is in good condition; coke port inventory was reported at 2.325 million tons, which has continued to oscillate and contract since the peak of this year’s 10,000 tons stage. Last week, it just ended the nine-week continuous decline pattern, with a slight rebound of 15,000 tons; coke steel mill inventory It was reported at 4.5231 million tons, a decrease of 596,200 tons from the 5,119,300 tons at the beginning of the year. On the whole, the inventory and total inventory levels of coke have started a downward trend since the beginning of the year, and the current inventory is at a relatively low level in history.

Coke demand

The general trend of sustained and steady growth in investment in my country has not changed, and expectations for the fourth quarter are good. In September, the output of pig iron was 75.78 million tons, a year-on-year increase of 6.9%; from January to September, the output of pig iron was 665.48 million tons, a year-on-year increase of 3.8%. The hot metal has maintained high demand for coke, which has prompted the price of coke to rise all the way. It is worth noting that since September, steel mills have started overhauls one after another. Most of the overhauls have short time and small scope, and have limited impact on molten iron output. Tangshan and Handan regions in Hebei have successively issued environmental protection production restrictions in autumn and winter. There has not yet been a strict production restriction. The supply of molten iron and crude steel have remained high, and steel mills have given favor to coking enterprises. The task of coking capacity reduction is relatively heavy, and steel capacity replacement and capacity reduction are also gradually progressing. The subsequent coke supply and demand pattern depends on the capacity reduction and capacity replacement of coking and steel plants. It is difficult to cool down the short-term coke demand heat.

According to statistics, from November to December, it is estimated that the blast furnace will add 24.35 million tons of new capacity, 14.87 million tons will be eliminated, the blast furnace capacity will increase by 9.47 million tons, and the demand for coke will increase again. The output of terminal steel remains high, and the further acceleration of destocking shows that demand has improved. The demand for coke is relatively stable. However, when steel mills enter the rhythm of limiting production during the heating season, coke consumption will be subject to certain restrictions.