From the annual comparison chart of coke prices from 2019 to 2023, it can be seen that the coke market continued to decline in the first half of 2023. After 12 rounds of ups and downs, the current coke price is 1,754 RMB/ton, which has dropped to the lowest level in the same period of the past five years.
From January to June 2023, the coke market continued to decline, with a cumulative decline of 34.6%
After two rounds of lifting and lowering at the beginning of the year in the first half of 2023, the price of the coke market remained stable for two and a half consecutive months. After entering April, it continued to decline for 10 consecutive rounds. As of the release of the report, the coke market had a total of 12 rounds of lifting and lowering, with a cumulative decrease of about 950 RMB/ton in the first half of 2023. The highest point of the year was 2,682 RMB/ton on January 1, and the lowest point was 1,754 RMB/ton on June 30, with a decrease of 34.6% within the six months.
At the beginning of 2023, the coke market experienced two consecutive rounds of decline, with a temporary stable operation for the past three months. In the second quarter, the coke market experienced 10 consecutive rounds of decline, and towards the end of June, the first round of increase was initiated, boosted by the positive rise in steel prices. However, the mentality of the coke steel game was heavy, and the first round of increase had not yet landed. Overall, the difficulty of landing the first round of price hikes has increased, and the overall market atmosphere has weakened. The steel market is in the off-season, with weak actual demand and a strong gaming mentality of Jiaogang.
Raw materials: From January to May 2023, the production of raw coal reached 1.91 billion tons, a year-on-year increase of 4.8%
Cost: Stopping the decline in coking coal prices still provides support for the coke market
Supply: Seasonal limited production of coke by coking enterprises slightly decreases in coke production
Demand: Coal coke steel enters the summer off-season and just needs support
On July 6th, the coal coke steel index was 1174 points, unchanged from yesterday, a decrease of 50.40% from the cycle's highest point of 2367 points (2021-10-11), and an increase of 146.12% from the lowest point of 477 points on December 20th, 2015. (Note: The cycle refers to the period from December 1st, 2012 to the present).
Overall, in terms of cost, the increase in coking coal prices provides some cost support for coke. In terms of supply, the operating rate of coke enterprises in the main production area is low, and the inventory in the factory is running low, resulting in a slight shortage of supply. In terms of downstream demand, the steel industry has entered a seasonal demand off-season, and downstream demand is difficult to significantly improve. However, due to the previous 10 consecutive rounds of decline in coke, which has now fallen to the lowest level in the same period in nearly 5 years, coke companies have generally suffered losses. With the support of higher coking coal prices, it is expected that the first round of increase in the near future may be about to land. As of the deadline for publication, some steel mills in Xingtai, Tianjin, and Shijiazhuang have raised the purchase price of coke by 50 RMB/ton (wet quenching) and 60 RMB/ton for dry quenching, with the first round of increase partially implemented. In the future, the business agency predicts that Jiao Qi's bullish sentiment will be strong in the short term, but due to downstream market constraints, the increase may be limited. In the long run, there is some room for improvement in the coke market after the weather turns cold and the off-season ends.
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