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SunSirs: Energy, Upstream Coal Mines Return to Work, Coke Market Pressure is Weak
February 18 2020 17:06:35SunSirs(Selena)

Futures: Coke opened lower on Monday, closing at 1,871 (down 10.5), adding more than 10,000 positions and increasing trading volume. Limited by the shortage of raw materials of coking coal and the high inventory of coke in the plant, most coke enterprises have limited production and large production reduction.

Spot: the coke market is temporarily stable, and the quotation of quasi first-class metallurgical coke is: 1,930 RMB/ ton for Rizhao Port, 1,800 RMB/ ton for Shanxi, 1,960 RMB/ ton for Tangshan. For coke enterprises, it will take time for the coal mines at the supply end to return to work late and fully recovered. Due to the shortage of raw materials, most coke enterprises take the initiative to reduce and limit production, and the supply further shrinks. In the steel plants, due to the factors such as the poor arrival of raw materials and the unsalable sale of finished products, the production limit and maintenance of the blast furnace continue to increase, and the downstream operation and transportation are still uncertain. Coke operates in a short-term or stable manner, focusing on transportation, coal mine resumption and inventory changes in various links.

Strategy analysis: under the current economic pressure, the government strengthened macro-control, increased counter cyclical regulation, loose policies to stabilize the market. The national epidemic prevention and control measures for COVID-19 have significantly inhibited the flow of people, the supply side of coke has contracted significantly, the coke enterprises have more production restrictions and reduced production, and the sharp rise of coking coal has driven the coke to be strengthened. At present, local governments have successively issued relevant policies to support the resumption of production, and the supply of coking coal may be gradually relaxed in the later stage; downstream steel plants take the initiative to reduce their warehouses, and the demand for raw materials is expected to further shrink.

 

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