In March of 2020, the coke market continued to decline. The main market price in Shanxi Province was 1,716.67 RMB/ ton at the beginning of the month and 1,563.33 RMB/ ton at the end of the month, with a monthly drop of 8.93%.
On March 31, the coke commodity index was 82.06, unchanged from yesterday, down 39.23% from 135.04 (2018-09-13), the highest point in the cycle, and up 136.83% from 34.65, the lowest point on March 3, 2016. (Note: cycle refers to 2011-09-01 to now).
Trend Analysis
Price: according to the data monitoring of SunSirs, as of March 31, the mainstream prices of secondary and quasi-primary metallurgical coke in Shanghai are 1,730 RMB/ton and 1,790 RMB/ton respectively; in Xuzhou are 1,700 RMB/ ton and 1,770 RMB/ ton; in Weifang, Shandong are 1,690 RMB/ ton and 1,750 RMB/ ton. The mainstream prices of secondary and quasi-primary metallurgical coke in Taiyuan, Shanxi Province are 1,590 RMB/ ton and 1,640 RMB/ ton; the mainstream prices of secondary and quasi-primary metallurgical coke in Mudanjiang, Heilongjiang Province are 1,630 RMB/ ton and 1,690 RMB/ ton; in Shenyang, Liaoning Province are 1,660 RMB/ ton and 1,720 RMB/ ton. The mainstream prices of secondary and quasi-primary metallurgical coke in Pingdingshan, Henan Province are 1,700 RMB/ ton and 1,800 RMB/ tonrespectively. The mainstream prices of secondary and quasi-primary metallurgical coke in Tangshan, Hebei Province are 1,680 RMB/ ton and 1,730 RMB/ ton; in Tianjin are 1,700 RMB/ ton and 1,800 RMB/ ton. The mainstream prices of secondary metallurgical coke in Panzhihua coke market in Sichuan Province, Liupanshui coke market of Guizhou province and Erdos coke market are 1,830 RMB/ ton, 1,920 RMB/ ton and 1,350 RMB/tonrespectively. The port trade of primary metallurgical coke is about 1,950 RMB/ ton, of quasi-primary metallurgical coke is about 1,850 RMB/ ton, and of secondary metallurgical coke is about 1,750 RMB/ ton.
Import and export: according to the data released by the General Administration of customs, China exported 360,000 tons of coke from January to February, a year-on-year decrease of 1.04 million tons, or 74.21%. The export volume of coke in January February was $90.48 million dollars.
Product: the coke market continued to decline last month, down three times, accumulatively down 150 yuan / ton. As of March 31, the main transaction price of quasi primary wet quenching coke in Shanxi was about 1,550-1,650 RMB/ ton. At the beginning of last month, due to the construction of downstream steel plants has not fully recovered, the demand for coke is limited, and the price of coke has declined. After the middle and late ten days, the steel plant gradually returned to work, mainly purchasing coke on demand. In April, the environmental protection and production restriction will be in place in Hebei Province. The iron and steel enterprises with performance evaluation of A and B in Tangshan city will not limit production. The iron and steel enterprises with performance evaluation of C will implement hierarchical management and control. The demand of steel plants is limited, and there is no strong support for coke. The coke enterprises have a stable start-up, and the price is slightly lower.
Upstream and downstream: the firmness of raw material price and the decline of finished product price in March put great pressure on the profits of steel mills. Although there is still 87.78% profit margin (research data of 247 steel mills in China), the overall profit level is low. According to the data of CISA, from January to February, member steel enterprises realized a year-on-year drop of 6.04% in sales revenue, a year-on-year drop of 35.8% in profits, and a year-on-year drop of 1.09% in sales profit margin of only 2.35%. It can be seen that its profit is expected to decrease even more at the industry level in March.
Industry: according to the price monitoring of SunSirs, in March 2020, there was a total of one kind of commodities rising month on month in the energy sector in the list of commodity price rise and fall, with LNG (7.42%) rising. There were 15 commodities falling on a month on month basis, with 13 commodities falling by more than 5%, accounting for 81.3% of the number of commodities monitored in the sector; the top three products falling were WTI crude oil (-57.34%), Brent crude oil (-48.93%) and LPG (-26.85%), with an average increase or decrease of -19.01% this month.
Market Forecast
In the follow-up, we will focus on the operating rate and price trend of the steel plant. With the gradual recovery of domestic production, the demand for coke has risen steadily, and the price of coke still has support for a long time.
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