Where is the core focus of the continuous rise in steel prices after the festival?
the rise in the price of rebar will drive the price of coke from two aspects: first, the synergy between varieties. It is a historical law that rebar and coke both rise and fall together; Second, the rise in steel price means that the profits of steel mills which are already at a high level as shown in Figure 6 may further rise, and the expectation of profit distribution in the industrial chain will boost the coke price
in the first three trading days after the Spring Festival, the price of the main contract of coke futures rose continuously, and the daily line closed positive for three consecutive days, which was the best among many commodity futures. We believe that under the condition of improved supply and demand, coke in March may still follow the strength of steel price and refresh the recent high
although the single screw extruder has been relatively perfect in recent years,
the rise of rebar drives the coke price.
as a variety in the same industrial chain, rebar and coke futures prices have always shown a highly positive correlation. We believe that the rebar futures price in March still has the power of action, which is mainly due to the positive attitude towards the demand increment brought about by the traditional consumption peak season. The rising price of rebar will drive the price of coke from two aspects: first, the synergistic effect among varieties. As mentioned above, it is a historical law that rebar and coke both rise and fall together; Second, the rise in steel prices means that the profits of steel mills that are already at a high level may rise further, and the expectation of profit distribution in the industrial chain will boost the coke price. Therefore, since we are optimistic about the price trend of rebar in March, it is logically easy to understand that we are optimistic about the price of coke at the same time
demand for resumption of production and improvement of steel plant
since January, coke demand has increased steadily. According to the data, in January, the average utilization rate of blast furnace capacity nationwide was 72.9%, compared with 71.6% in December last year. In February, despite the influence of the Spring Festival, the blast furnace capacity utilization remained basically stable
from the historical law, the cumulative growth rate of pig iron output representing coke demand shows a close positive correlation with coke price. The steady increase in blast furnace capacity utilization means that the demand side supports the coke price. Moreover, after March 15, with the end of the production restriction in the heating season, most steel mills in cities with limited production will actively resume production, which will increase the demand for coke
limited space for supply increment
march, the end of the production restriction in the heating season means that the production restriction measures for coking enterprises will also be cancelled. However, the increment of coke supply side is limited. This is because, since late December 2017, the production restriction policy of coking enterprises in Shanxi has been relaxed, and the end of the production restriction in the heating season is equivalent to the confirmation of the current situation
we can prove this judgment from the weekly operating rate data, which makes the specimen subject to great additional strain and rapid crushing. According to the data, in December last year, the average operating rates of coking enterprises with a capacity of 1million tons, 1million-2million tons and 2million tons were 76.91%, 79.51% and 80.05% respectively, which continued to rise significantly compared with January this year. This operating rate has reached the level before the production restriction in the heating season. In other words, there is limited room for large, medium and small coking enterprises to continue to increase their operating rates
inventory pressure needs to be vigilant
through the above analysis, we believe that the end of limited production in the heating season will enhance the demand side of coke more than the supply side, thus making positive changes in the supply-demand relationship. However, we need to pay attention to the change of inventory. According to the latest data, on February 23, the inventory of domestic independent coking plants in the sample totaled 901000 tons, a year-on-year decrease of 20.6% in 5 and 5 boards, a significant increase from 776000 tons at the end of January; Coke port inventory totaled 2.383 million tons, a year-on-year decrease of 7.5%, slightly lower than the 2.538 million tons at the end of January; The average available days of coke inventory in large and medium-sized steel plants in China was 12 days, up 20% year-on-year, up from the end of January. In other words, at present, the inventory of independent coking enterprises has increased significantly, the inventory of coke raw materials in steel mills has increased, and the inventory level of intermediate links has decreased slightly. It can be seen from this that the supply pressure of coke is mainly concentrated in coking enterprises, and the inventory pressure needs to be vigilant
to sum up, we believe that after the end of production restriction in the heating season in March, the demand side increment of Coke will be greater than the supply side increment, the relationship between coke supply and demand is improving, and the rise of steel price is expected to drive the rise of coke price