Core points of view
<UNK>. Since this year, the impact of environmental production restrictions on coke companies has clearly weakened, even if there are certain production restrictions in some areas during certain periods of time(extended focusing time), but due to the difficulty of defocusing, the actual production of Coke has little effect.
<UNK>. Although the overall mood of the market is pessimistic, the market is generally not optimistic about the future of the real estate industry to continue to pull the steel industry, but the terminal demand in the short term is still not very realistic.
<UNK>. With the arrival of the traditional steel consumption season in September, the speed of the stock of steel in the past two weeks has increased, and steel prices are expected to bottom rebound. This will also drive Coke prices to stabilize and rebound.
Coke futures contracts have been lower since August. On August 28, Coke rebounded with the black system. However, Coke futures failed to continue to rise on August 29 and run all day. As of the close of August 29, the price of coke's main contract in 2001 was 1,857.5 yuan/ton, a decrease of approximately 0.08 %. Which way would Coke go next? Is the rally just a flash in the pan or is it waiting for the moment to pick up?
First, Jiao enterprise started to pick up, steel factory inventory accumulation
Since this year, the impact of environmental production restrictions on coke companies has clearly weakened, even if there are certain production restrictions in some areas during certain periods of time(extended focusing time), but due to the difficulty of defocusing, the actual production of Coke has little effect. Data show that the total national Coke output from January to July 2019 was 274 million tons, an increase of 6.7 % year-on-year, of which the National Coke output in July was 3.962 million tons, an increase of 5.9 % year-on-year. In the early period, Shanxi Jiao Enterprise was limited by the start of the Second Youth Club. After the end of the Youth Club on Tuesday, Jiao Enterprise started to gradually pick up. As of August 23, the National Jiao Enterprise start-up rate was approximately 76.13 %, and Zhouhuanbi increased by 1.46 %.
With the rebound in construction, coupled with the weakening of the downstream steel market, demand gradually weakened and Coke stocks began to accumulate. At present, the coke inventory of steel mills is at a medium to high level. As of August 23, the total Coke inventory of domestic sample steel mills was 4,589,500 tons, and Zhouhuanbi increased 41,900 tons. In addition, the stock of coke in the port is also at a historical high of 4.68 million tons, but it should be noted that the inventory of the port is basically a Coke spot with mixed warehouse receipt quality, and the liquidity is low. During the downturn in the market, the stock of coke in the port has a small impact on the coke spot market..
Second, terminal demand or increase, it is expected to stop falling and stabilize
Although the overall mood of the market is pessimistic, the market is generally not optimistic about the future of the real estate industry to continue to pull the steel industry, but the terminal demand in the short term is still not very realistic. The rapid decline in steel prices in the off-season has caused the profits of steel mills to shrink rapidly, and the production of pig iron has also dropped. According to data, the National pig iron output from January to July 2019 was 47.344 million tons, of which the National pig iron output in July was 68.34 million tons. The monthly decline of 2.6 %. However, with the arrival of the traditional consumer season in September, terminal demand will improve, and the improvement of terminal demand will gradually be transmitted to the coke market, and the coke market will stop falling. At present, the production limit of Tangshan steel mills in September weakened. If the production limit in the post-market is no longer strengthened, due to the low level of coke stocks at the current stage of coke enterprises, the improvement of terminal demand will be quickly transmitted to the coke market. However, near the 70th anniversary of the National Day, the expectation of strict production restrictions in various places is relatively large. The impact of late production capacity and environmental protection restrictions is temporarily difficult to assess. It is recommended to pay close attention to the implementation of environmental restrictions on steel Coke companies and the production capacity of coke companies.
III. Post-market outlook
Taken together, the rapid drop of coke spot in the first round is the result of the two-way effect of supply and demand. Although Coke stocks are currently at a low level, the overall start of construction has gradually recovered, and the stocks of downstream steel mills are still at a high level, and the price of superimposed steel continues to fall. The steel mill profit is compressed, Coke price is also not wrong. With the arrival of the traditional steel consumption season in September, the speed of the stock of steel in the past two weeks has increased, and steel prices are expected to rebound to the bottom. This will also drive Coke prices to stop falling and stabilize, and the ups and downs of the disk will be the market. The expression of mood change. It should be noted that the National Day is approaching, and local steel Coke enterprises are expected to increase their production restrictions on environmental protection. It is recommended to pay close attention to the promulgation and implementation of the policy on environmental protection and production restrictions in various regions.