Looking back on February,cokeThe spot is running stably for the time being, and the futures bottomed out and rebounded. In mid-to-early February, the miner’s quotation was strong, the cost of coke entering the furnace was high, and losses continued, and the superimposed terminal demand recovered slowly. The increase of steel mills has not been implemented for a long time, the market confidence is insufficient, and the futures and spot prices have fallen.
After mid-February, the confidence of the terminal began to pick up, the steel table needs to be improved, the profit per ton of coke turned from loss to profit, and the production limit of superimposed mining areas is expected to increase.coking coalThe supply and demand situation is tight, coal prices are rising, coke is supported upwards, shipments are improving, and futures are rising. In terms of spot goods, due to repeated high steel prices, the profits of steel mills still need to be improved, and the coke steel game is still going on.
From the end of February to the beginning of March, the transaction of steel products improved and the profits of coke steel plants recovered, the demand for coking coal improved, and the supply of coal shrank before the superimposed two sessions, coal prices rose, and the support below the spot coke spot strengthened. However, demand in the terminal peak season still needs to be verified. In addition, the chairman of the Federal Reserve has recently released hawkish remarks. The market is worried about aggressive interest rate hikes. Commodities are under pressure. The overall macro sentiment has cooled, and the market continues to fluctuate. On the whole, steel consumption has a certain degree of resilience. By the middle and late March, the terminal will enter the peak season market, boosting the transaction of raw materials, and coke will start to enter the pattern of both supply and demand.
Jiaoqi started work steadily
Statistics show that as of March 3, the production capacity utilization rate of coke enterprises was 72.5%, an increase of 0.1% over the same period in February. The operating rate of coking enterprises with a production capacity between 1 million and 2 million tons was 68.40%, an increase of 1.30% over the same period in February; the operating rate of coking enterprises with a production capacity of less than 1 million tons was 67.70%, an increase of 2.30% over the same period in February; the production capacity was 200 The operating rate of coking enterprises with more than 10,000 tons was 80.90%, a decrease of 2.20% from the same period in February. In the first ten days of February, due to the strong coal price in the early stage and the pressure on the cost of furnace materials, coke companies had no intention to increase production; in the middle and late ten days, coal mines accumulated slightly, and the prices of some coal types were slightly lowered. . However, with the tightening of coal mine safety supervision, the proportion of online coking coal auctions and failed auctions has decreased, coal prices have risen slightly again, and the profits of coke companies have been squeezed again.
On March 6, the Marketing Committee of the China Jiaotong Association held a market analysis meeting via video. Many coking enterprises participated in the meeting. All enterprises agreed that they could extend the coking time and reduce the load according to their own conditions. The production limit was suggested to be around 30%; at the same time, Reduce or stop the purchase of high-priced coal, reduce costs, and negotiate and determine the price of coke according to market changes. Squeezed by coal prices, coke is currently only slightly profitable. With the recovery of downstream demand and the recovery of molten iron production, this move will accelerate the process of raising coke prices and landing.
Slight increase in steel mills
As of February 24, according to agency statistics, the coke inventory of 247 sample steel mills across the country was 6.6064 million tons, an increase of 208,800 tons from January; the coke inventory of 230 sample independent coking plants across the country was 693,000 tons. Reduced by 201,000 tons.
The total coke inventory of the coke steel plant was 7.2994 million tons, an increase of 7,800 tons from January. In February, the inventory of coke steel mills continued to increase, mainly due to the successive resumption of production of steel mills, the recovery of blast furnace production capacity, and the continuous replenishment of warehouses in the factory. The current inventory is second only to the high level in 2022. However, judging from the situation in previous years, the coke inventory of coke steel plants will generally increase in March and April, mainly because the terminal enters the peak season, and the profit recovery of steel plants will increase the demand for inventory replenishment.
In 2022, the main reason is that the economies of various regions will be severely affected by the epidemic, and the overall industrial chain will be under pressure to a certain extent, so the seasonal impact of in-factory inventory will not be significant. In 2023, my country’s development goals are relatively clear, and the GDP growth rate is around 5%. It is expected that the consumption characteristics of the terminal peak season will be more obvious this year, and steel mills will increase their inventory replenishment driven by positive feedback from downstream.
The start of steel mills and the production capacity of blast furnaces are expected to increase steadily. After the Lantern Festival, the start-up of steel mills picked up significantly. As of February 27, according to the agency’s statistics, 247 steel mills had added 50 blast furnaces for resumption of production in February, involving an average daily molten iron production capacity of 150,000 tons per day. A total of 20 blast furnaces have been overhauled, involving an average daily molten iron production capacity of 80,000 tons per day. Most of the maintenance is for routine maintenance. Among them, 9 blast furnaces have not yet resumed production, involving a production capacity of about 40,000 tons per day. In March, 12 blast furnaces are scheduled to resume production, involving a production capacity of about 41,000 tons/day; 3 blast furnaces are scheduled to be shut down for maintenance, involving a production capacity of about 10,000 tons/day. If production is carried out in accordance with the current statistics for suspending and resuming production, it is estimated that the average daily output of molten iron in March will be 2.385 million tons.
In February, the terminal demand was gradually released, the market activity increased, and the demand for steel products picked up. Steel prices rebounded slightly in the middle and late ten days, and the total social inventory of steel products decreased, which drove steel mills to be more active in production. The two sessions ushered in at the beginning of March, but the start-up of steel mills still showed a slight increase. Based on the data of previous years, this is basically in line with market expectations. The production capacity of blast furnaces has not changed much before and after the two sessions. impact of production measures. On the whole, the lower part of the operating rate is supported by peak season demand, and the upper part is limited by the maintenance and production reduction plan. In the case of better profit expectations for steel mills, it is expected that the next steel mill will start operations or increase slightly.
Steel mill profits turn better
As of March 3, the data of 247 steel mills surveyed by the organization showed that the profit rate of steel mills was 42.86%, an increase of 8.66% from the previous month. Since the downstream resumption of work in February, as the transaction of building materials improved, steel prices oscillated and rebounded, and the profits of steel mills showed overall recovery. pick up.
On March 7, the Ministry of Housing and Urban-Rural Development expressed full confidence in the stabilization and recovery of the real estate market. On the one hand, the impact of the epidemic has weakened, and market supply and demand have been better released; . This year’s Spring Festival is much earlier than in previous years. In February, the terminal projects have started to start one after another. Over the past two weeks, the social inventory of steel has gradually decreased, and the output of molten iron has also increased slightly. The progress of resuming production in March is expected to be better than that of previous years. Although the current policy release is not as good as the market expected, and the market trading enthusiasm has dropped, it can be seen from the inventory and production data that the market is still confident in the follow-up market. With the implementation of peak season expectations, the profits of steel mills will continue to rise steadily in March. (Source: Futures Daily Author Unit: Ritar Futures)
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