Looking back at the coke price trend in October, driven by the macro-favorable policy expectations, market speculation and downstream steel mills replenishing inventory, the coke price rebounded rapidly in the first half of the month, but as the macro expectations failed to meet and the black series weakened, speculative demand gradually left the market and waited and watched, the price of raw coal was the first to fall, and the price of steel fluctuated and weakened, the profits of steel mills were damaged, and the cost support of coke weakened. On October 23, the first round of coke price cuts was officially launched, with a drop of 50-55 yuan/ton, and the downward channel of coke was opened. So far, the coke price has fallen for 3 rounds, with a cumulative drop of 150-165 yuan/ton. However, the macro-favorable policy has been exerted again, the market sentiment has been significantly restored, and at present, coke and steel enterprises are profitable, and the contradiction between supply and demand is not prominent. There is limited room for coke prices to continue to fall, and it may stop falling and stabilize.

1. The decline in raw coal narrowed, and some types of coal have fallen below the low of the year, and the cost support of coke reappeared

Recently, the price of coking coal continued to fall, with the price of various types of coal falling by 20-150 yuan, and the proportion of unsold in the auction market increased significantly. The quotations of various coal mines in the production area have been lowered one after another. The overall sales situation is general, the supply is relatively loose, and the pressure on mines is prominent under the situation of gradually accumulating inventory. In the short term, the price of coking coal remains weak. However, this week, the decline in coking coal has gradually narrowed and some types of coal have fallen to the lowest position. The room for coking coal prices to continue to fall is limited, and the cost support of coke reappears.

2. The contradiction between supply and demand is not prominent, and the logic of price reduction is still mainly profit game

Supply: As of November 15, Mysteel statistics of independent coke enterprises: capacity utilization rate is 73.15%, the average daily output of coke is 661,400 tons minus 3,100 tons, the coke inventory is 772,500 tons minus 64,700 tons, and the national average profit per ton of coke is 36 yuan/ton. However, the three rounds of coke prices were implemented on the 18th, and some coke enterprises fell into losses again. In addition, environmental protection inspections in some areas have become stricter recently, and the overall operation of coke enterprises may continue to decline in the later period. However, macro-good news has been reported again recently. Driven by the rebound of the futures market, some speculative demand has emerged, and the coke inventory in the coke enterprise factory has declined. Inventory pressure has been alleviated, and the operation of coke enterprises will not decline sharply in the short term.

In terms of demand, as of November 15, the blast furnace operating rate of 247 steel mills was 82.08%, a decrease of 0.21 percentage points from last week and an increase of 2.41 percentage points from last year; the blast furnace ironmaking capacity utilization rate was 88.58%, an increase of 0.71 percentage points from last week and an increase of 0.57 percentage points from last year; the profit rate of steel mills was 57.58%, a decrease of 2.16 percentage points from last week and an increase of 28.58 percentage points from last year; the average daily molten iron output was 2.3594 million tons, an increase of 18,800 tons from last week and an increase of 4,700 tons from last year. Although steel prices have recently adjusted, steel mills still have profits. This week's molten iron upward movement is mostly affected by the new blast furnaces in some regions. At present, the macro policy is in a "vacuum period", and the subsequent demand is under pressure. The price is boosted by details. It is expected that the molten iron will fluctuate downward in the short term, but the demand for coke is still supported.