Take Off Of "Unique Double Coke": Coking Coal And Coke Increase Continuously For Eight Rounds

Driven by the strong steel market, coking coal and coke are coming out of a strong market.

On December 9, the domestic futures market closed, most commodity futures fell, the coal plate rose strongly, coking coal rose nearly 6%, coke rose more than 1%, the price of four years and two years respectively.

It is worth mentioning that coking coal and coke rose one after another after the winter, with an increase of nearly 40% compared with the beginning of the year, which was almost the same as the previous hot iron ore market, and became the commodity category with the highest increase in the year.

In terms of spot, according to the global Proctor data of S & P, in the past three months, the price of domestic Shanxi low sulfur main coking coal has increased by 13%, and the price of Tangshan to 1665 yuan / ton; the price of domestic 62 strength coke has increased by 14% to 2240 yuan / ton.

"It can be said that the strength of coking coal is driven by coke, and the strength of coke is driven by steel." In fact, there has been a continuous increase in the price of Coke between Proctor and the seller in the global market

At the same time, he also stressed to reporters that at present, both coking coal and coke are in the "green and yellow" stage of supply, which will continue in December.

Reshuffle of coking coal supply

In terms of products, the starting point of this round of coking coal market is the ban on Australian coal import in early October.

According to statistics, China's annual coal consumption exceeds 4 billion tons. In the first eight months of this year, China produced 2.45 billion tons of raw coal. However, in the same period, Australia imported 70.43 million tons of coal (steam coal + coking coal), which had little impact on the overall supply.

Australia's coal imports accounted for 32% of China's total coal imports before August 2020.

However, after the release of the news, domestic coking coal futures continued to soar for three consecutive days, and the market completely got out of the consolidation state at the end of September, and the rising trend has continued to this day.

The reason is that in China's whole coking coal supply, imported coking coal accounts for less than 15%, but 40% of them are from Australia and 40% from Mongolia. After the outbreak, the import of coking coal from Mongolia fell sharply, from 1000 vehicles per day before the outbreak to less than 300 vehicles per day, and the import source was more dependent on Australia.

"For China, although the consumption of imports is very small, it has played a certain role in price stabilization. In the past, when the domestic coking coal price rose more than a certain degree, imported coking coal was used to stabilize the price." A person engaged in coking coal trade told reporters.

At the same time, among the global coking coal supply, Australian coking coal has the best quality, followed by coking coal from Shanxi Province of China and Mongolia, and first-line coking coal products from Canada and the United States. Although the price of higher quality coking coal is slightly higher, it can greatly improve the steelmaking efficiency of steel mills and reduce the cost.

Therefore, after Australia's coking coal import is limited, China's steel mills choose to import coking coal from Canada, the United States and other regions. Although the quality is relatively poor, these costs can be fully covered by profits under the continuous rise of downstream steel prices, which also makes China's coking coal import pattern more diversified and safe.

At the same time, due to the winter environmental protection and safety inspection policy, domestic coal production capacity is also constantly affected, the growth rate is relatively limited.

On the other hand, Shaanxi Province is currently carrying out coal mine safety production investigation and Resolutely Curbing major accidents; Chongqing Municipality, on December 9, held a teleconference on safety production and social stability of the whole city, and decided that from December 5, all coal mines in the city had been shut down and production was stopped, and all coal mines included in the closure and withdrawal were not allowed to go down the well.

"The most tense month will come out in December, but the most tense month will come out in November." "At present, it is still driven by supply and demand fundamentals," Lu said

Limited coke capacity

In terms of coke, from the beginning of this year to the end of this year, the policy of de capacity has shown its power on the market. The growth rate of production capacity is lower than that of domestic pig iron production, resulting in price rise.

In terms of demand, both the good performance of steel terminal demand after the National Day holiday and the high enthusiasm of blast furnace start-up are important supporting factors for strong coke demand.

According to the calculation of CISA, the apparent consumption of crude steel from January to September was 769 million tons, an increase of 8.94% year-on-year, 1.7 percentage points higher than that of January August. The start of major national investment projects and the rapid recovery of downstream industries such as automobiles and household appliances have boosted the demand for steel.

Stimulated by higher profits, from January to September this year, China's crude steel output was 781.59 million tons, up 4.5% year-on-year; pig iron output was 665.48 million tons, a year-on-year increase of 3.8%; steel output was 964.24 million tons, a year-on-year increase of 5.6%.

"In terms of the daily crude steel production level, it did not exceed 3 million tons last year, but it has exceeded 3 million tons many times this year. It is estimated that the crude steel production this year will reach 1.05 billion tons, an increase of about 5% over last year." China Steel Association vice president and Secretary General Qu Xiuli said.

It is worth mentioning that this is also the first time in the history of China's crude steel production to exceed 1 billion tons. In the winter of last year, environmental protection and production restriction, a major factor restricting the production increase of Chinese steel enterprises, did not seem to meet the strength of previous years.

Last year's Tangshan autumn and winter environmental protection production restriction was implemented ahead of schedule in October, which led to the rapid decline of the national pig iron production to a lower level. This year, the northern region has been heating, although Tangshan has issued several autumn and winter environmental protection and production restriction program, but the actual implementation is not strong.

It is reported that at present, the utilization rate of blast furnace capacity in China is stable at 85%, which belongs to a high level. Therefore, at present, the environmental protection and production restriction in autumn and winter this year is more reflected in the process of limiting sintering, and the impact on blast furnace production is less than expected.

"First of all, steel enterprises in the current situation of profit expansion, the willingness to reduce production on their own is weak." A person in the iron and steel industry told the reporter, "secondly, after years of investment in environmental protection facilities, the production capacity that does not meet the requirements and must be stopped is already a small number. The current production restriction measures are more likely to be a normalized production restriction. With the upgrading and transformation of environmental protection facilities of enterprises, such restrictions will be gradually relaxed, and finally make these enterprises who meet the requirements benefit, so as to continue to be environmentally friendly The investment is guaranteed. "

In terms of coke production, according to the data of the National Bureau of statistics, from January to October, China's pig iron output increased by 4.3%, while coke production decreased by 0.7%. The mismatch between coke supply and demand can be seen (the proportion of imports is very small and can be ignored).

Since July this year, the coking profit has exceeded 400 yuan / ton. Under the stimulation of high profit, the coking plant is quite enthusiastic in production. According to the data of 230 independent coking plants, the daily average output is still at a high level, but there is no further rise, indicating that the domestic production has reached a bottleneck period.

"After de capacity, the daily average output of 230 independent coking plants fell from 700000 tons to 680000 tons. If both supply and demand remain at the current level, then the coke market will continue to be in short supply. " A coking plant said in an interview.

?