The relatively strong pattern of the coke market is not over yet there are still stories about coking capacity reduction at the end of the year

A Current status: The market continues to quickly digest inventory

Second, the growth rate of coke supply cannot keep up with the growth rate of pig iron, which has exacerbated the situation of short supply.

However, the proportion of coke in the cost of pig iron has also rapidly increased to 42%, and the high price of coke has become a major obstacle for steel mills to reduce costs and increase efficiency.

On the one hand, steel mills are expected to reduce the coke ratio as much as possible by increasing the grade of iron ore into the furnace, but there is not much room for the coke ratio to be lowered.
The data of the coke ratio into the furnace has been relatively stable in recent months; on the other hand, entering the furnace In the off-season of steel terminal demand, steel mills are expected to arrange routine maintenance of blast furnaces to reduce the demand for coke.
Of course, whether the blast furnace of the steel mills headed by Tangshan during the heating season will be suffocated again by the policy is a key point that affects the coke supply and demand pattern.

In addition, it is also necessary to consider the reality that this year's blast furnace production schedule is not as fast as expected.
According to the production plan, the blast furnace capacity to be put into operation in November should be 13 million tons.
However, even if the commissioning of some blast furnaces is delayed, the newly added blast furnace replacement capacity at the end of the year will also bring new coke demand.

E Breaking the game: three ways to balance supply and demand

There are three ways to solve the problem of insufficient supply in the coke market: first, relying on the implementation of coking capacity reduction in other provinces at the end of the year is not as strong as Shanxi, new capacity is gradually released and gradually reaching production, the coke capacity gap will be made up; second, the seasonal weakening of demand drags down steel prices significantly After the decline, steelmaking fell into continuous losses, and blast furnaces took the initiative to reduce production on a large scale, which eventually led to a double reduction in coke supply and demand, and the market showed a weak balance; third, the production restriction in autumn and winter increased, and the blast furnace production restriction was close to the level of last October.

　　Of course, as the temperature drops, we must also consider the winter storage of coke from steel mills in January next year, which may once again aggravate the tight supply of coke.
At present, the coke inventory of 110 sample steel plants has rebounded from the previous low of 4.
45 million tons to 4.
66 million tons, but there is still room for replenishment from the level of 5.
12 million tons before the Spring Festival in previous years.
In addition, traders’ inventories are at a low level.
Although the port’s profits have been lucrative in the near future, around 100 yuan/ton, the port’s inventory has only risen slightly from a low of 2.
31 million tons to 2.
37 million tons, which is still at a low level in the past five years.
Once a certain price trend appears, the actions of traders may gradually aggravate the imbalance between supply and demand.

　　Therefore, under the premise that there is no continuous loss in downstream blast furnace production, and the implementation of production restrictions in autumn and winter is not strict, if the coking capacity reduction in provinces other than Shanxi is not implemented at the end of the year, and the blast furnace production restriction and production reduction efforts become stricter, then the coke will rise.
It will stop at the 2101 contract, and the top of the price is basically determined by the profit margin of steelmaking.
If the capacity reduction efforts in other provinces are also implemented well at the end of the year, and the blast furnace production is limited and the production reduction is less than expected, the shortage of coke will continue, and the blast furnace production will gradually recover to a high level after the heating season.
The corresponding is that the coke rise will continue to 2105 Contract, the top of the price follows the price of steel to move up further.

　　Generally speaking, whether the coke supply shortage can be reversed depends on the intensity of capacity reduction at the end of the year and whether downstream demand is impacted by environmental protection or losses.
This year is the closing year for the 4.
3-meter coke oven and the steel-fixed coking policy.
The coking capacity reduction at the end of the year is worth looking forward to, and the demand for replenishment of the downstream before the Spring Festival has yet to be released.
The spot price of coke is still on an upward channel and has not been reversed.
The Coke 2101 contract currently corresponds to the delivery cost of the spot warehouse receipt after 9 rounds of increase.
It is mainly suppressed by the expected seasonal weakening of steel terminal demand.
It is expected to run at a high level in the later period, and the 2105 contract corresponds to the recovery after the heating season.
The downstream blast furnace production demand and the gradually filled capacity gap are still in the destocking cycle, and there is a high probability that there will be room for replenishment and demand in the market outlook.
Bargaining has more value.
It is recommended to follow the steel market sentiment to increase and reduce warehouse operations.

Transfer from: Futures Daily