In May 2020, the coke market continued to rise. The main market price in Shanxi Province was 1,513.33 RMB/ ton at the beginning of the month and 1,663.33 RMB/ ton at the end of the month, with a monthly increase of 9.91%.
On May 31, the coke commodity index was 87.31, the same as the previous day, down 35.35% from 135.04 (September 13, 2018), the highest point in the cycle, and up 34.65% from 151.98 the lowest point on March 3, 2016. (Note: cycle refers to 2011-09-01 to now)
Trend Analysis
In May, the coke market rose in three rounds on May 8, May 19 and May 29, with a cumulative increase of 150 RMB/ ton. Last month, the steel market operating rate steadily increased. By the end of the month, the operating rate of the blast furnace of 247 domestic steel plants had reached more than 90%, which has been rising for 14 consecutive weeks. The demand for coke was relatively good. Since the highway resumed charging on May 6, the cost of coke has increased, which has affected the coke opening. The first two rounds of price increase were initiated. As of May 29, quasi primary wet quenching coke in Shanxi Province reported 1,650-1,750 RMB/ ton, up about 150 RMB/ ton from the same period last month. As for the port, the inventory decreased slightly, and some traders were reluctant to sell. By the end of the month, the price of quasi first-class metallurgical coke was 1,800-1,850 RMB/ ton in cash.
After the narrow fluctuation of the market in April, the domestic steel market finally ushered in a rebound trend in May, and the steel industry as a whole showed a rebound. Although there was a downward trend at the end of May, the overall market volatility did not exceed expectations, and the industry was still optimistic about the future market. Last month, the blast furnace operation rate of 247 steel plants in China was over 90%, which had been rising for 14 consecutive weeks, with strong support for coke demand.
According to the price monitoring of SunSirs, in May 2020, there were 9 commodities in the list of commodity prices rising and falling, including 7 commodities with a rise of more than 5%, accounting for 43.8% of the monitored commodities in the energy sector; the top 3 commodities were WTI crude oil (70.42%), Brent crude oil (36.27%) and thermal coal (17.66%). There were 7 kinds of commodities falling on a month on month basis, with 3 kinds of commodities falling by more than 5%, accounting for 18.8% of the number of commodities monitored in the sector; the top 3 products falling were LNG (-13.94%), DME (-8.54%) and LNG (-5.23%). Last month, the average rise and fall was 8.07%.
According to SunSirs, with the gradual increase of production restriction in Shandong Province, the supply of coke in some areas has been in short supply. The coke inventory has been kept at a low level, and the demand of downstream steel plants is well supported. In June, Xuzhou will implement the policy of capacity reduction, which will have a certain impact on the coke output. The start-up of downstream steel plants will be stable at more than 90%, and the demand for coke will be good. It is expected that the coke will still have room to rise in the future, and the high level will be stable in the short term.
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