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SunSirs: Energy, Cost Collapse, Coke Market Plunges again

April 08 2020 10:37:45     SunSirs (Selena)

Futures: Coke fell in shock Friday, closing at 1,617.5 (down 47.5), adding more than 4,000 positions and reducing trading volume. The overseas epidemic of COVID-19 continued to spread, and many countries cut interest rates and loose currencies, and commodities were under pressure. OPEC and other oil producing countries began to organize discussions on the issue of stabilizing crude oil prices, and coke short positions were concentrated to increase positions and suppress. Coke will fluctuate this week or under pressure. Pay attention to epidemic information, capital expectation and change of supply and demand rhythm.

Spot: coke market is in a weak position, and the scope of the fifth round of increase and decrease is expanded by 50. Quotation of metallurgical coke: Rizhao grade II 1,700 (50% lower), Tangshan grade II 1,650 (50% lower), Linfen grade I 1,600. Port inventory: Rizhao Port 121 (increased by 4), Qingdao port 172 (closed). In terms of coke enterprises, the continuous lower coal price in the upper reaches has gradually weakened the support for coke price, the stable supply of coke enterprises is loose as a whole, the fifth round of increase and decrease is gradually expanded, and the small coke enterprises in Shanxi have the phenomenon of strong price due to low inventory. In the steel plant, the blast furnace operation rate has been rising steadily, but due to the poor profit of finished products and the impact of inventory pressure, the coke is still purchased on demand. In April, the environmental protection production limit is imminent in Tangshan, Hebei Province, the steel plant or the demand for coke is weakened, and the coke spot operation is weak for a short time.

Strategy analysis: at present, the government strengthens macro-control, loose policies release liquidity to stabilize the market, fully promotes resumption of work and production, and increases counter cyclical adjustment. The spread of COVID-19, the implementation of monetary easing policy in many countries, the collapse of OPEC agreement, crude oil plummeted, and industrial products in the global stock market were under pressure. In the near future, the inventory of building materials and social inventory of the downstream steel plants began to drop, the terminal demand gradually recovered, and the overall wide fluctuation of futures and spot goods. Under the favorable influence of domestic and foreign easing policies, the demand for building materials in the second quarter may remain high, and the support will be strengthened after the futures fall to the undervalued and low price areas.


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