中文
After the National Day holiday,coke futures fell sharply,forming a sharp contrast with the hot market before the holiday.Last week,the first round of coke spot price increases and decreases was fully implemented,and there are still expectations of further increases and decreases.The market sentiment is relatively cautious.This article will analyze the future trend of coke prices from macro and industrial perspectives.
On a macro level,in September,influenced by favorable policies such as the Federal Reserve’s interest rate cuts and domestic reserve requirement ratio cuts,the entire black sector,including coke,saw a significant increase from low levels.However,after the National Day holiday,with the decline of favorable macro sentiment,the black sector weakened again.Looking ahead,the NPC Standing Committee meeting will be held in November.In the short term,macro expectations still have a certain supporting effect on coke prices,and in the medium term,coke prices will return to fundamentals.
In terms of industry,there is currently over 550 million tons of coking capacity in China,and we expect to add 19.22 million tons of coking capacity by 2024.The contradiction of overcapacity in the coking industry will become increasingly prominent.Once the profits of the coking plant rebound,the coke production will be quickly released,which is also the reason why the profits of the coking plant have been consistently low.The oversupply continues to suppress the profits of the coking plant.In this context,the rebound in coke prices in recent years is mainly based on the expansion of steel mills’profits and the increase in iron production.The production of molten iron in the first half of this year increased from 2.2082 million tons on March 15th to 2.3994 million tons on June 19th.The main contract price of coke futures rose from the lowest point of 1907 yuan/ton on April 8th to the highest point of 2428 yuan/ton on May 7th,with a cumulative increase of 521 yuan/ton,or 27.32%.The production of molten iron in September also started to rise from a low of 2.2089 million tons,and by the week of October 25th,the production of molten iron had rebounded to 2.3569 million tons.Coke futures rose from the lowest point of 1730 yuan/ton on September 11th to the highest point of 2320.5 yuan/ton on October 8th,with a cumulative increase of 590.5 yuan/ton,or 34.13%.
Although the production of molten iron continued to increase as of the week ending October 25th,we believe that this growth is unsustainable.After the fourth quarter,molten iron production will fall again.On the one hand,as end consumption enters the off-season,the decline in demand will suppress molten iron production.On the other hand,macroeconomic expectations for the entire black commodity market will gradually fade,steel prices will continue to weaken,steel mill profits will shrink again,and molten iron production will be difficult to maintain high levels.Therefore,from an industrial perspective,we believe that coke prices will continue to remain weak in the fourth quarter.
Overall,we believe that short-term macro expectations will continue to support coke prices,but issues such as overcapacity in coking and a decline in iron production will continue to suppress coke price performance.In the medium term,coke prices will continue to maintain a weak trend.