The profit contraction of the hottest steel plant

2022-08-02
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After a long period of silence, coke futures rebounded strongly on December 3, with the main 1901 contract up 5.49%. Analysts said that the positive resonance of macro and industrial aspects helped the coke futures price rebound sharply. However, as a midstream variety in the black industrial chain, coke has to follow the price trend of finished products. However, due to the decline of downstream steel prices in the early stage, the profit of the steel plant is gradually transmitted to the coke end after the contraction, so the coke will be difficult to reverse the overall weak operation pattern in the short term

futures prices rebounded significantly

yesterday, while coke futures that improved the mechanical properties of materials rebounded significantly. The main 1901 contract was up to 2271 yuan/ton, closing at 2239 yuan/ton, up 116.5 yuan or 5.49%

"yesterday's sharp rise in coke prices was caused by the resonance between the macro and industrial sectors." Meierya futures analyst Yaojin told the China Securities Journal. In addition, the prices of finished products and billets, which had been under pressure over the weekend, rose by different margins. The overall bullish atmosphere of the black system led to the upward trend of coke prices

despite the significant rebound in the futures market, the coke spot market continued to operate in a weak position. Yao Jin said that since the large reliable manufacturers of Jinan new era Gold Testing Instrument Co., Ltd. in the early stage have significantly narrowed the profits of the steel plant, and the production restriction of the blast furnace has become stricter, the steel plant has begun to continuously suppress the raw material prices. At present, the fourth round of coke price reduction has basically been implemented, with a cumulative decline of about 500 yuan/ton. However, compared with the previous three rounds of price reduction, coke enterprises have strong resistance to the fourth round of price reduction. The game between coke and steel is actually quite fierce, and the macro benefits have fully released coke enterprises' upward sentiment

the fundamentals are still poor

"it is because the early production restriction of steel was seriously less than expected that the price fell rapidly in November. It is also reported that some steel mills reduced production due to losses." Wangpanxia, an analyst of Founder's medium-term futures, said that more and more steel mills are overhauling recently, and it is expected that the overhauling area will be further expanded in December. Therefore, the market-oriented price reduction forces steel mills to reduce production, which will limit the space for coke price rise in the overall situation

from the perspective of coking enterprises, wangpanxia said that in November, the coke price fell by 450 yuan/ton in nine days, but the profit is still about 300 yuan/ton. This means that the power of coking plant to limit production is not strong, and the output will continue to accumulate. EPS and XPS belong to the new situation, new changes and new demands of thermoplastic materials

however, Yao Jin said that in terms of inventory, at present, coke port inventory and coke enterprise inventory are basically at the lowest level in the year. However, the domestic blast furnace production restriction this year is generally weaker than last year, and the national blast furnace operating rate has not decreased significantly month on month. It is expected that steel mills still need to replenish inventory in the later period, so the basic support of coke price is still strong

as for the future market, analysts of CITIC futures said that the fourth round of raising and lowering was continuing, the steel mills' willingness to suppress was not reduced, some coke enterprises boycotted, and took the initiative to limit production and protect prices. The price of downstream steel fell, and after the profit of the steel plant contracted, it was gradually suppressed and transmitted to the coke end. At present, the profit of coke has narrowed considerably. It is expected that the spot Coke will be under pressure in the short term, and the futures price will remain volatile in the short term

Yao Jin said that coke, as a midstream variety in the black industrial chain, can only determine its position based on its own fundamentals, and the trend still follows that of finished products. Although the trend of coke and finished products can be divided in stages, coke can not go out of the trend market independently after all. This round of finished products' rise is only a periodic rebound triggered by the stimulation of the news, and the overall weak pattern is difficult to reverse. Therefore, the rebound of coke futures price will not last long. It is still viewed as empty for a long time, and it needs to be cautious to continue to pursue more

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