SunSirs: Energy, Some Steel Plants Completed Fourth Round of Price Increase and Decrease, The Coke Market Fluctuated Widely

Futures: Coke rose slightly on Thursday, March 12, closing at 1,827.5 (up 5.5), adding more than 7,000 positions and increasing volume. The domestic epidemic situation of COVID-19 continued to improve with good news, the intensity of resumption of work further increased, and the demand for steel gradually recovered. Because the spot price of steel plant is quite high, the overall black market performance is strong, and some steel plants began to increase and decrease in fourth round. Coke fluctuates in a wide range in the short term or in the long term, and attention should be paid to market expectation, fund initiative and change of supply and demand rhythm.

Spot: coke market as a whole, Shanxi, Hebei part of the steel mills began the fourth round of price increase and decrease of 50. Port inventory: Rizhao Port 89 (increase 2), Qingdao port 158 (decrease 4); quotation of metallurgical coke: Rizhao Level 2 1800, Tangshan Level 2 1750, Linfen level 1 1650. For coke enterprises, after the recovery of coking coal supply, the capacity utilization rate and daily average output of coke enterprises continue to raise, the supply of coke increases, and the inventory in the field rises. The production of coke enterprises in the main production area has reached the normal level. After the three rounds of price lifting and lowering, the profit is at a low level, which is more in conflict with the fourth round of lifting and lowering. For steel mills, the weekly building materials output slightly increased, but the passive production reduction due to inventory pressure and delayed demand is still continuing, with the main purpose of purchasing on demand and the short-term weak operation of coke spot.

Strategy analysis: in the first quarter of the current economic pressure, the government strengthened macro-control, increased counter cyclical regulation, loose policies to stabilize the market. The spread of COVID-19 in foreign countries and the breach of the OPEC agreement led to a sharp decline in US stocks and crude oil, and increased international environmental instability. In the near future, the state will guide the orderly resumption of work and production, increase macro policies such as loose monetary policy and stable investment in infrastructure, and increase the demand for black energy products in the later stage. The supply side of coke is loose for a short time. Due to the influence of inventory pressure and cash flow, the downstream steel plants passively reduce production. The demand for short-term coke is compressed and the spot is under pressure.

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