The demand for the hottest coking coal is difficul

Coking coal demand is difficult to improve

iron ore futures continued to be strong on Thursday, driving the overall bullish view of the black industrial chain. The 1601 contract of coking coal futures formed a strong bottom support at the line of 560 yuan/ton. However, the overall situation of the industrial chain has not improved significantly: the contraction effect of coking coal supply is not obvious; The elimination of coke production capacity continues, and the demand for coking coal is restrained; The weakening of steel sales indicates that the price decline in the steel industry chain is not over

the effect of coking coal supply contraction is not obvious

since the second half of 2014, the market has great expectations for the supply contraction of coking coal mines. In terms of domestic coking coal production, Shanxi, Shandong, Inner Mongolia and other real estate accounted for a relatively large proportion. In 2014, the State Energy Administration announced the approved capacity planning of various regions, and Shanxi's coal production exceeded the approved capacity by 25%. If it is produced according to the approved capacity, the total coal output will shrink significantly. However, in terms of actual output, the supply contraction in several major production areas was far less than market expectations. From January to July 2015, Shanxi's raw coal output was 540 million tons, with a cumulative year-on-year decrease of 4.53%. Shandong's raw coal output from January to July was 95.47 million tons, with a cumulative year-on-year increase of 4.77%. From January to July, the raw coal output of Inner Mongolia fell 5% year-on-year, which can move forward or backward according to the situation 67%。 In terms of coking coal storage in Shanxi Province, an institutional survey showed that due to the poor export sales in August, the inventory in Luliang and other places began to accumulate, and the sales pressure increased in the fourth quarter. Some coal mines had to adopt the industrial pipeline and LNG terminal fields of early holiday and extended holiday time for miners to slow down the accumulation rate of inventory

in terms of import, from January to July 2015, the cumulative import of coking coal across the country was 28.275 million tons, a year-on-year decline of 21%, which has been negative growth for 19 consecutive months since January 2014. Low import brings low port inventory. The main import of coking coal is the economic cost problem ports (Jingtang Port, Rizhao Port, Lianyungang port, Tianjin port, Qingdao port, Fangcheng Port) the latest inventory of 4.648 million tons on August 22, 2014, which is the low point in recent years. However, the contraction of import volume did not lead to a better transaction. According to the feedback of import traders, the current port inquiry is light, the transaction has not been crossed, and the steel mills' willingness to buy goods is weak

coke capacity elimination is under way

compared with July, the profits of steel mills deteriorated again from August to September, which was mainly reflected in the weakening of steel prices, while the price of iron ore, which accounts for the bulk of the cost, remained strong. Under the squeeze of steel mill profits, steel mills tend to reduce the purchase price of coke first to reduce their own operating costs. On August 8 and August 26, NISCO continuously reduced the coke purchase price by 40 yuan/ton, indicating that the steel plant is willing to transfer costs. Under the continuous price reduction of steel mills, the losses of coking plants are becoming more and more serious. Some coking plants can only reduce the coke output by extending the coke quenching time. In terms of capacity utilization, the operating rate of coking plants with a capacity of less than 1million tons fell from 80% in February to 61% at present, and that of coking plants with a capacity of more than 2million tons fell to 67%, the lowest level since this year. Compared with small coking plants, the operation of large coking plants is more worthy of market attention. At present, the operating rate of large coking enterprises has hit a low level in recent years, indicating that they have reached the edge of serious losses. The elimination of coking capacity is ongoing, and the demand for coking coal is difficult to improve in the short term

steel demand weakened

from the perspective of fixed asset investment, the growth rate of fixed asset investment in the second quarter of 2015 was 10.6%, the low point in nearly 10 years since 2003. In July 2015, the completed investment in the real estate industry increased by 4.3% year-on-year, with negative growth for 17 consecutive months, close to the level of the 2008 financial crisis. Steel traders reported that steel sales continued to weaken after September, with steel prices declining in Shanghai and Hangzhou in East China and Beijing, Tangshan, Shanxi and other places in North China. The demand for steel on the construction site has declined significantly, and some construction sites have poor funding

in short, coking coal will continue to decline in the future