2. The company's inventory began to accumulate, and the stock of steel mills and ports remained high
At the beginning of October, Jiao's Coke inventory continued its low state in the first two months. Jiao's Coke company increased its Coke by 100 yuan per ton. However, due to the post-holiday Coke company's recovery rate, the production rate was higher than that of steel mills, and North China was due to autumn and winter. The promulgation of the air pollution control plan, The blast furnace operation rate is not as good as the coke furnace operation rate, and the coke company inventory begins to accumulate. As of October 25, the coke inventory of 100 independent Coke plants in China was 515,000 tons, and Zhouhuanbi added 53,000 tons. With the accumulation of coke stocks, Coke companies failed to land on coke in early October, because the high inventory of coke in steel mills and ports, instead, steel mills dropped the coke by 50 yuan/ton to land quickly. According to data, as of October 25, the coke inventory of 110 sample steel mills in China was 4,571,200 tons, and Zhouhuanbi dropped by 33,100 tons. At present, the high stock of steel mills is dominated by the consumption of coke. With the advent of the heating season in the later period, the downstream steel market will also be transferred to the off-season. Therefore, steel mills have a tendency to weaken the demand for Coke. In terms of port inventory, the current Coke port inventory is still the highest point in recent years. As of October 25, the total inventory of the four ports was 4.448 million tons, and Zhouhuanbi increased by 42,000 tons. Among them, Tianjin Port has a Coke inventory of 360,000 tons, Lianyungang has a Coke inventory of 85,000 tons, Rizhao Port has a Coke inventory of 1.953 million tons, and Qingdao Port has a Coke inventory of 2.41 million tons. On the whole, the coke stock is in the middle and high position and the supply is relatively loose. After the arrival of the heating season in November, Coke demand will obviously weaken, and it is recommended to pay close attention to the inventory situation in each link.
3. Downstream demand continues to be weak, and late removal capacity is variable
Due to the downturn in the real estate industry, the steel market performed less than expected this year during the peak season, and pig iron production has also declined. According to data, the National pig iron output from January to September 2019 was 612.028 million tons, an increase of 6.3 % year-on-year, and the growth rate fell by 0.6 percentage points. Among them, in September, the national output of pig iron was 67.306 million tons, and the monthly ratio dropped by 3.868 million tons, a growth rate that fell by 5 percentage points. After entering October, the weather in the North was seriously polluted. On October 16, the Ministry of Ecology and Environment issued the "Comprehensive Air Pollution Management Plan for the Autumn and Winter of 2019-2020 in Beijing-Tianjin-Hebei and its surrounding areas." Hebei, Shanxi, Shandong, Jiangsu, and Anhui and other regions successively issued environmental protection restrictions. Production plan, The operating rate of blast furnaces in steel mills across the country has continued to decline. According to data, as of October 25, the operating rate of blast furnaces in the country was 63.54 %, and the Zhouhuan ratio was flat, of which the operating rate of blast furnaces in the Tangshan area of Hebei Province was 59.42 %, and Zhouhuanbi dropped by 0.72 percentage points. At present, the blast furnace operation rate of steel mills is slightly lower, the enthusiasm for Coke procurement has weakened, and even some steel mills have stopped purchasing. The heating season is approaching, and downstream demand is expected to continue to weaken in the short term.
Faced with the weak demand for Coke, the market hopes that the coke industry will eliminate production capacity at the end of the year, but from the current point of view, the production capacity situation is still unclear. The original market estimate of coke production capacity was a net reduction, but the previously released coking industry production capacity document in Shanxi Province stated that the total production capacity in Shanxi Province was reduced to 147.68 million tons, and on this basis, the completed production capacity was maintained. Only reduced. At present, Shanxi's total production capacity is estimated to be about 138 million tons, which is actually lower than the target value. Therefore, the impact of production capacity on Shanxi's Coke production is limited. In addition, the overall plan for the reduction of coal consumption in Shandong Province requires 10.31 million tons of coking capacity. Several coking enterprises that are scheduled to close in 2019 are rumored to have uncertain production dates. As a result, hopes that the end of the year to decapacity may become uncertain, if the possibility exists in the provinces to delay the deproduction capacity, then this year may be a reduction in coking capacity.
IV. Post-market outlook
In terms of coking coal, after the steel plant dropped the coke by 50 yuan/ton to the ground in early October, the coke company's profit was severely compressed, and the coke company turned to the coking coal price, which was gradually looser in supply and demand. All varieties of coking coal fell in October. 30 ~ 60 yuan/ton. In addition, the weak international coking coal demand, the increase in the amount of Australian coal to the port, superimposed the recent port customs clearance restrictions, resulting in further accumulation of port coking coal stocks. Following the heating season in November, where environmental restrictions on production will gradually tighten across regions and steel companies will be constrained from starting work, coking plant demand for coking coal may be further reduced and coking coal prices may be suppressed by high inventories. It should be noted that the current amount of imported coal is not much, if the port stop customs declaration later, this will have a certain relief to the high storage of domestic coking coal.
In terms of Coke, on the whole, the current supply of Coke is slightly loose, and the weak demand in the downstream adds up to the high inventory of steel mills and ports, making Coke under greater pressure, while the high start of coking plants and the limited production of environmental protection in autumn and winter make Coke worse. With the arrival of the heating season, steel mills will continue to tighten production restrictions, when the demand for Coke will continue to weaken, if the year-end decapacity implementation is not as expected, then it will be difficult for Coke prices to continue to rebound. However, Jiao's profits have been severely compressed, and the probability of continuing to fall in the later period is not large. It is expected that the coke shock in November will have a relatively weak operating probability. It is recommended to pay attention to the effect of limited production in the late heating season on both ends of coke supply and demand.
