In September 2022, the coke market experienced a round of ups and downs. As of the press release, the price of quasi primary metallurgical coke in Shanxi was 2,500 RMB/ ton, and the price at the beginning of the month was 2,600 RMB/ ton, with a monthly drop of 3.85%.
Supply: Affected by the epidemic situation and safety inspection, the overall supply of coking coal has shrunk, the overall trading atmosphere of the market is fair, and downstream demand is still relatively positive. The downstream coke is close to the National Day holiday, and some coke plants begin to reserve raw materials. In case of tight supply and acceptable demand, the price of coking coal may be on the strong side, depending on the downstream market demand.
This month, the coke market only achieved a round of increase and decrease at the beginning of the month, with a cumulative increase and decrease of 100-110 RMB/ ton. In the month, coke enterprises started a round of increase. However, due to the poor sales of downstream finished products, they failed to achieve the goal as of the deadline.
At the beginning of September, the coke market was affected by the poor performance of the downstream steel market, the low overall profits of the steel mills, the decline in coke purchasing enthusiasm, the decline in futures volume in the same period, and the low enthusiasm of the trade market to take goods. The first round of increase and decrease came to the ground, with a reduction of 100-110 RMB/ ton this round. Subsequently, steel mills started the second round of lifting and lowering, but the coke market was still supported by raw materials. The second round of lifting and lowering did not come into effect under the attitude of the coking enterprises to maintain a high price, and the coke market has always maintained a stable but weak operation. In late September, with the rising price of coking coal and the demand of downstream steel mills to replenish stocks before the festival, the coke market began to recover, and some coking enterprises started the first round of increase of 100-110 RMB/ ton. However, in the same period, the profitability of downstream steel plants did not improve significantly. Coke was mainly purchased on demand, and the first round of increase failed to materialize due to lack of demand support. To sum up, with the rising price of coking coal, the cost of coking enterprises keeps rising, and some coking enterprises begin to lose money. Recently, the profitability of steel mills has improved to a certain extent, and the overall market has fluctuated upward. At present, Coke Steel has a strong game mentality. In the future, it is expected that coke prices will remain stable and relatively strong, focusing on the downstream sales of finished products and the impact of coke market trends on coke prices.
According to the data of the National Bureau of Statistics, in August 2022, China's coke output will be 39.11 million tons, a year-on-year decrease of 2.5%, 1.5 percentage points higher than that in July, and an increase of 310,000 tons or 0.80% month on month. The average daily output in August will be 1.2616 million tons, an increase of 10,000 tons or 0.8% compared with 1.2516 million tons in July, but still lower than the average daily output in the first seven months of this year.
From January to August 2022, the national coke output was 318.22 million tons, down 1.1% year on year, 1.3 percentage points less than that from January to July. The cumulative output from January to August was 477.33 million tons annually, higher than the level of 464.46 million tons in the whole year of 2021.
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