SunSirs: The 10th Round of Coke Rise and Fall has been Implemented in China (May 26th - June 2nd)

According to the Commodity Market Analysis System of SunSirs, from May 26 to June 2, 2023, the tenth round of increase and decrease in the coke market was implemented. As of June 2, the price of quasi first-class metallurgical coke in Shanxi region was 1,746 RMB/ton, a decrease of 5.42%.

In terms of supply: The coking coal market is currently operating steadily, and the main mining areas are currently operating normally. Recently, traders have slightly improved their mentality and actively entered the market for inquiries. The inventory of mining areas has declined to some extent, and some high-quality coal types have low inventory. However, with the implementation of the ninth round of coke reduction, the enthusiasm of coke companies to purchase goods is slightly low, and the off-season of finished products has affected the market mentality. As the end of the month approaches, the market mentality has once again weakened, and the wait-and-see mentality has gradually increased. Currently, most of the coking coal prices in the main production areas have stopped falling and stabilized.

The tenth round of increase and decrease in the coke market during this cycle has been implemented, with a cumulative decrease of 750 RMB/ton for wet quenching and 900 RMB/ton for dry quenching as of now. After ten consecutive rounds of downward adjustments in coking enterprises, their profits have tightened, but the operating rate remains at around 75%. Currently, the supply of coke remains stable. In terms of demand, as the weather warms up, most regions have entered the rainy season, and the finished product market has entered a seasonal off-season. The profitability of steel mills has declined. Currently, there is a strong demand for coke, and some manufacturers with sufficient inventory have controlled the arrival of goods. They only maintain on-demand replenishment of coke. Overall, in the current off-season downstream, there is insufficient demand expectation and the overall atmosphere of the coke market is weak. It is expected that the operation will remain weak in the short term. In the future, the focus will be on the operating situation of coking enterprises, the price trend of coking coal, and the inventory situation of coke in various links.

The coke market price of Shandong port continues to decline. The quasi first level ex warehouse price of the port is about 1,800-1,820 RMB/ton, and the first level ex warehouse price is 1,900-1,920 RMB/ton. The overall port market is weak, and the trading atmosphere is slightly bleak. The actual trading is weak, and the wait-and-see atmosphere is strong.

Freight prices are a barometer of port mentality. The upward trend in freight prices has a good market mentality, while the downward trend in freight prices has a weak market mentality. Last week, the overall inventory of ports has increased, and the enthusiasm of traders to collect ports decreased. Freight prices fell, and the intention to collect ports was low. The market atmosphere is on the wait-and-see side.

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