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On August 14-16, 2020,
16th Steel
Development Strategy Conference, hosted by SteelHome, was
successfully held in Shanghai Tower. Around 800 delegates from
governments, associations, steel mills, miners, traders, research
institutes attended the one of biggest events in China steel industry.
9th International Raw Materials Supply Chain Summit, 10th Coal & Coke
Development Strategy Conference, 8th China Commodities E-Commerce Summit
and 2020 SteelHome Summer Report were simultaneously held.
On the afternoon of August 15, Wang Baiqiu, vice president of Beijing
Xuyang Hongye Chemical Co.Ltd delivered an opening speech titled
with “Outlook on the Supply and Demand of Coke Market”.
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Wang Baiqiu,
vice president of
Beijing Xuyang Hongye Chemical Co.Ltd |
Summary of
speeches
Due to the impact of the pandemic, the utilization rate of coking
capacity in the first half of this year kept at a low lever
year-on-year. The capacity reduction in Shandong and Jiangsu has been
implemented as scheduled, and a large number of newly increased capacity
has been postponed into production, resulting in a year-on-year decrease
in coke production in the first half of the year. It is expected that
the overall coke production capacity in the second half of the year will
still be the trend of de-capacity.
Shanxi carried out de-capacity at the end of October, 2019, Hebei
underwent de-capacity at the end of December, and the 4.3-meter coke
oven was eliminated in Anyang, Henan. Meanwhile, Shandong introduced the
policy of “production determined by coal” and the implementation of
production limitation for environment during heating season in Beijing,
Tianjin and Hebei. It is expected that the annual net capacity reduction
will reach more than 20 million tons, and the annual coke output will
fall to about 460 million tons, a year-on-year drop of 2.3%.
In the first half of this year, the price of coke remained low
year-on-year (average price moved down by about 200 yuan/t). The price
support of coking enterprises was weak, and prices were more affected by
supply, demand and inventory, and fluctuated frequently. It is expected
that coke prices will fluctuate in a high level in the second half of
this year. With the support of tight supply and demand, coke prices are
expected to reach their highs during the year, and the rebound of coke
prices will last for a certain period under the background of continuous
promotion of capacity reduction policies.
Although the price of coke has fallen this year, due to the sharp
drop in coking coal prices and in coal blending costs (average profit
contribution is about 200 yuan/ton), coke profits have not decreased but
increased. As of July 31, the average profit of the national coking
industry was 250 yuan/t. It is expected that coke profits will remain at
a reasonable level in the second half of the year, and will expand as
coke prices rise, or profits of coking plants may continue to exceed
that of steel mill.
In the first half of this year, the domestic coke saw a clear prices
upside down and a large inflow of overseas resources. It is expected
that the large-scale import of coke will continue in the second half of
the year. However, as overseas steel mills gradually resume production,
the importable resources will be greatly reduced. At the same time, as
the FOB price of coke exports continues to rebound, traders’ export
arbitrage space will appear, and coke imports will decrease and the
export volume will pick up. From January to June, a total of 1.76
million tons of coke was exported, down 54.3% year-on-year, of which
exports to Malaysia was 353,000 tons, Indonesia 314,000 tons, India
130,000 tons, Vietnam 100,000 tons, South Korea 89,000 tons, Japan
88,000 tons, and Australia 77,000 tons, Brazil 52,000 tons. From January
to June, China imported 919,600 tons, Japan imported 456,500 tons,
Australia 127,100 tons, South Korea 95,000 tons, Poland 141,000 tons,
Russia 30,000 tons, and Taiwan 25,000 tons. |
