In March, Coke futures prices continued to fall, and the 1905 contract fell from a maximum of 2,170 yuan/ton to a minimum of 1965 yuan/ton, a drop of nearly 10 %. We believe that the margin factor has been reflected in Coke futures prices or have been adjusted to put.
Change in supply and demand
From the demand side, since March, the utilization rate of blast furnace capacity in steel mills has dropped significantly.In the week of March 8, data released by the Shanghai Steel Union showed that the utilization rate of blast furnaces in 163 steel mills across the country was 72.99 %, compared with 75.94 % the previous week, which means that the utilization rate of production capacity has dropped by 3 percentage points in a week, which is the highest since 2018.
The sudden increase in production restrictions at steel mills in early March was an assault under the assessment of environmental indicators.In late February, the Ministry of Ecology and Environment reported on environmental air quality in key areas from October 2018 to January 2019. The notification showed that the average concentration of PM2 .5 in "2 +26" cities from October 2018 to January 2019 was 51-105 μg / M3, with an average of 80 μg / M3. It rose 6.7 % year-on-year.Before that, the goals set by the cities were generally declining or continuously improving. Compared with specific cities, it can be found that in the "2 +26" cities, the air quality in autumn and winter generally failed to meet the standards.It is under this pressure that steel mills in North China have significantly increased production limits since late February, meaning that demand for Coke has fallen.
In terms of supply side changes, capacity utilization of 100 Coke furnaces in the week of March 8 was 79.66 %, compared with 80.72 % in the previous week, which also fell.However, the utilization rate of coking enterprises is lower than that of blast furnace.
We can use the ratio of the utilization rate of blast furnace capacity and Coke furnace capacity utilization rate as a reference indicator to measure the demand/supply of coke. The increase in the ratio may mean that the pattern of coke supply and demand is conducive to the increase of coke price, and the decrease in the ratio may mean that the pattern of coke supply and demand suppresses Coke price.We found that the March ratio fell significantly, and that the price of spiral steel was significantly stronger than Coke over the same period.
Stock change can be used as an auxiliary indicator of the change of supply and demand.According to the latest data, on March 8, the total inventory of independent coking plants in the sample was 516,000 tons, and at the end of February it was 483,000 tons; The total stock of coke four ports was 3.74 million tons, and at the end of February it was 3.72 million tons; The coke inventory of 110 steel mills in the country was 4.536 million tons, and at the end of February it was 4.542 million tons; The total inventory of each link was 8.792 million tons, and at the end of February it was 8.746 million tons.That is, since March, Coke stocks have risen.
Therefore, the fall in Coke prices in March came from changes in supply and demand.
The risk factor has been reflected
As noted above, the recent decline in Coke prices is a change in the supply and demand side, but we do not think there is much room for Coke prices to continue falling.First, the supply and demand side has improved. The utilization rate of blast furnace production capacity in steel mills is at a historically low level in the same period, and the space for decline continues to be limited, while the utilization rate of coke oven production capacity is relatively high, and the "2 +26" city is also a key distribution area of coke oven, and the production limit of coke furnace may be increased.
Second, from the valuation point of view, Coke futures prices may have reflected the interest factors.Judging from the base difference, when the coke futures contract price is less than 2,000 yuan/ton, the coke futures premium is more than 10 %, which is the highest in the past two months, and it is also higher than the 1805 contract and the 1705 contract in the same period of history.Judging from the ratio of related varieties, the current ratio of the main contract of spiral steel/coke futures is about 1.90, which is at a high level in recent months.In other words, from the perspective of base difference level and relative variety ratio, the current Coke futures price already reflects the relatively weak fundamentals.
In summary, the recent fall in Coke futures prices is mainly due to changes in the supply and demand sides. We believe that Coke futures prices have been adjusted or put in place.