March 14, 2018 - After three months of heavy overcast, the price of coking coal ushered in a long absence. At this time, the price of steel in the downstream of coking coal has risen nearly one month. Analysts said that the increase in coking coal prices mainly benefited from the improvement of macroeconomic policies and the recovery of market confidence. However, the growth of downstream steel demand is not optimistic.

Dazhou Coking Coal Futures is reported to the State Council for approval. The return of coking coal prices after a long period of decline will help the future of coking coal futures after listing.

The reporter learned yesterday that steel demand in Hebei, the largest steel-producing province after the National Day, has risen significantly, and the coking coal market has remained stable. Specifically, the price of coal for sale in the Tangshan region was raised by RMB 40-60/ton, and that for Xingtai District was increased by RMB 20/ton. The market price is: Tangshan area, the main coking coal raised 40 yuan, the adjusted price is 1125 yuan; fat coal increased 60 yuan, the current price of 955-1005 yuan; 1/3 coking coal increased by 60 yuan, the current price of 950 yuan / ton. Kailuan Group began to increase coal and 1/3 coke without tax by 60 yuan on October 1st, and coking coal without tax rose by 40 yuan. It is reported that this part of Kaiyuan's price adjustment is aimed at market users, and no adjustment has been made to the price of key users. Jizhong Energy Coking Coal is up 20 yuan.

In October, Shanxi Coking Coal Group, the largest coking coal producer, had canceled preferential policies for rail transportation last month. The preferential rate was generally between RMB 30-50/ton. Another downstream company disclosed that Shanjia has a price increase of RMB 20. Market participants estimate that the price of Shan coking coking coal is about 50 yuan in disguised form.

Longji Group, Yankuang Group and Linyi Mining Coking Coal all increased, ranging from RMB 20 to RMB 30. Pang Xuejie, an energy analyst, said that from the perspective of price adjustment policies, coal mines have a relatively small price increase for coking coal, and most companies have not conducted general increases for all users, reflecting a cautious and conservative mentality and sharply increasing prices. The time has not yet arrived.

From July to September, coking coal prices have been falling. Since the beginning of this year, Shanxi Coking Coal Group has lowered the prices three times in July, August and September, accumulating a total of 30%.

Pang Xuejie believes that the recent trend of the steel coke market is significantly upward. After the Spring Festival, the operating rate of coking plants in various regions has increased, and the operating rate of individual coking plants has reached 100%. Coking coal procurement enthusiasm has been rising. In addition, the market worried about the shortage of coking coal demand in the later period and the price increase, and began to snap up the stock. It is expected that the stability of the market will continue in the later period.

In fact, this round of coking coal rebound is closely related to the warming of the steel market. Starting from September 10, the domestic steel market has risen in price during the turmoil, and it has continued until early October. As of October 10, the price increase of major steel grades was around RMB 400/ton, and the billet price was RMB 510, with a cumulative increase of more than 10%.

My steel network analyst Zhu Xi'an believes that the current increase in steel prices mainly benefits from the EU’s announcement that it has no restrictions on the purchase of government bonds, and the Fed decided to implement EQ3. In early September, the National Development and Reform Commission centralizedly approved a large number of rail transit, port, and municipal projects. Boost market confidence.

According to the data, the PMI index for total steel orders in September was 52.7%, up 8.1% from the previous month, of which the direct supply orders index rose by 6.8 percentage points from the previous month, and the export orders index rose by 5.8 percentage points from the previous month. This indicates that not only domestic demand continues to improve but also foreign demand continues to improve.

Analysts expect that the trend of the steel market in the entire October should be stabilizing shocks. 

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