At present, the spot price of coke is operating smoothly, but the futures price is not so calm. Under the influence of different factors, the futures market fluctuates sharply. As of April 6, the outgoing price of first-class metallurgical coke in Rizhao Port was 2200 yuan/ton, the main closing price of futures was 2371.5 yuan/ton, and the spot premium was 171.5 yuan/ton again. Recently, the game of steel coke has been extremely fierce. Many coke companies in the main producing areas of Shanxi, Shandong, and Hebei have proposed an increase of 110 yuan/ton for dry quenching and 100 yuan/ton for wet quenching. At the same time, some steel mills have also begun to raise the price. Nine rounds of price cuts.

Coking profit or shrink.

After the eighth round of price cuts landed, the earnings of coke enterprises shrank sharply. Compared with the same period in previous years, the profit is not low. The national average profit per ton of coke is 330 yuan/ton, and the profits of coke enterprises are still huge. At present, downstream steel mills have broken 1,000 yuan in profits per ton of steel in the context of the sharp drop in raw material prices and the rising prices of finished products. Steel mills’ high-profit coke price pressure has weakened. This is a true portrayal of the current industry. Although coke is oversupply and inventories continue to accumulate, coke prices can remain stable.

During the same period, coking coal inventories of coking companies have gradually decreased, and some coking companies have started replenishment. However, with the reduction of internal coal supply and insufficient external coal clearance resources, the price of high-quality coking coal has remained relatively strong, and there is still room for growth in the later period. Therefore, it is a high probability event that the profits of coking companies continue to shrink when the probability of price increases for coke and coking coal is not equal in the later period.

Strict environmental protection affects supply and demand

Recently, Tangshan City held a meeting on comprehensive environmental quality control of iron and steel enterprises, requiring all iron and steel enterprises to implement emission reduction measures in strict accordance with special emission requirements. In addition, the second round of the third batch of central ecological and environmental protection inspectors was fully launched, and the inspection work for a period of one month was carried out. Companies across the country strictly implement environmental protection requirements and put environmental protection in the first place. At present, profit per ton of steel has been at a high level for nearly two years, and production capacity has not yet been fully released, or even tightened. The data showed that the utilization rate of blast furnace ironmaking capacity was 86.92%, a week-on-week drop of 1.38%, and the average daily molten iron output was 2.3137 million tons, a week-on-week drop of 36,800 tons. With the continuous decline of molten iron production, the demand for coke has shrunk repeatedly. On the whole, downstream demand is insufficient, and coke supply is relatively surplus.

Strict environmental protection limits the downstream coke demand while also restricting the release of coke production capacity. The data shows that the utilization rate of the entire sample of independent coke companies excluding the eliminated capacity was 87.55%, a decrease of 0.91% on a week-on-week basis, and the average daily output was 724,800 tons, which was a decrease of 5,700 tons on a week-on-week basis. Recently, Shanxi's environmental protection has been further strengthened. Among them, the Luliang area immediately shut down two local coking enterprises involved in heating tasks after the heating season, with a total production capacity of 1.4 million tons. Fenyang City took over the task of environmental protection and production restriction. From April 2 to May 2, the four coking plants in the city will enter the braising oven to keep warm; the coking time of the tamping coke oven shall not be less than 72 hours, and the coke will be clean and hot. The coke output of the recovery furnace was extended to 100 hours. Therefore, under the strict implementation of environmental protection policies, the supply of coke will continue to decrease.

Enterprises maintain high inventories

Recently, coke traders have taken the initiative to gather in ports, and port inventory has increased rapidly. Data show that the total inventory of the four northern ports was 2.175 million tons, an increase of 125,000 tons on a week-on-week basis. On the one hand, some coke companies in the main producing areas have fallen into a loss-making situation and have formulated coke oven maintenance plans to reduce supply; on the other hand, after the eighth round of price cuts, coke prices have gradually stabilized and strengthened. Speculative users take over coke, and coke supply and demand will improve in the short term.

At present, speculative demand for coke has increased, and coke inventories of coking enterprises have slightly improved, ending the continuous increase in inventory in March. The inventory of coke enterprises is now 681,600 tons, a decrease of 77,100 tons on a week-on-week basis. In the context of strict environmental protection, downstream steel mills have reduced the purchase of coke and reduced their inventory. The coke inventory of steel plants was 8,731,600 tons, a week-on-week decrease of 137,600 tons, and the average usable day was 17.39 days, minus 0.27 days. On the whole, the coke inventory of coking enterprises and steel mills is relatively high, and the coke supply is sufficient.

On the whole, coke futures have regained their gains after a number of consecutive days of decline, but the sustainability of the rise is doubtful. On the one hand, the cost of warehouse receipts is estimated to be 2,290 yuan/ton based on Lianyungang quasi-level coke, and there is room for arbitrage; On the other hand, it is estimated that there is an average daily surplus of 20,000 to 30,000 tons of coke, the overall supply and demand are still in excess, and the inventory is still accumulating. Therefore, with the overall surplus of coke, coke futures have limited upside.