In June, domestic coking coal prices were weak and then stable. At the beginning of the month, the price of Anze low-sulfur main coking coal, Lingshi sulfur fertilizer refined coal and Mongolia No. 5 coking coal at Ganqidu Port were 2000 yuan per ton, 1900 yuan per ton and 1290 yuan per ton, respectively. In early June, the market trading atmosphere worsened, the weak coal price correction, Anze low sulfur main coking coal, Lingshi medium sulfur fertilizer refined coal and Ganqidou port Mongolia No. 5 coking coal per ton were adjusted back by 100 yuan, 50 yuan and 10 yuan, respectively, to 1900 yuan per ton, 1850 yuan per ton and 1280 yuan per ton. In the second half of the year, the downstream just needs to perform well, the auction flow is reduced, the coal price is mainly stable, and the above coal prices are flat.
The price of seaborne imported coking coal fell in June. At the beginning of the month, the CIF of non-Australian first-line main coking coal and second-line main coking coal were $260 per ton and $225 per ton, respectively, due to the lack of demand release, domestic coal prices are relatively low, and the price of imported coal by sea is weak and downward. On June 26, the CIF prices of non-Australian first-line and second-line primary coking coal were $252 per ton and $220 per ton, respectively.
In June, domestic coking coal prices showed a trend of falling first and then stabilizing, and the weak operation of coal prices in the middle and early ten days mainly had the following reasons.
First, the supply of coking coal has gradually increased, and the number of imported coal customs clearance has increased significantly. The supply of coal mines in producing areas has slowly recovered, some coal mines have resumed production, and the overall supply has approached the level of November 2023 when production was higher. The number of national coal customs clearance continued to increase, in June, the highest single-day clearance of 1509 vehicles, reaching the highest level of clearance in nearly three years, and the average daily clearance volume rose to about 1250 vehicles. The amount of imported coal arriving at the port by sea also increased significantly compared with May, and the overall supply gradually increased.
Second, the coke spot market ushered in a second round of price cuts. On June 12, mainstream steel mills lowered the coke purchase price by 50 yuan to 55 yuan per ton. Due to the relatively limited drop in the cost of coal into the furnace, the immediate profit of coking enterprises has declined, the wet quenching coke has dropped to near break-even, the procurement pace of some coke enterprises has slowed down, and most of them are based on the just-needed replenishment. At the same time, affected by the price reduction of coke, the coking coal market sentiment has undergone subtle changes, intermediate traders are willing to wait and see, the enthusiasm of speculative stockpiling has declined, and some traders who have stockpiling in the early stage have dumped goods.
Third, the characteristics of steel accumulation in the off-season gradually appear, forming a certain pressure on the raw material end. In June, according to the steel production, sales and storage data released by the consulting agency, the production of the five major materials (rebar, wire, hot rolled coil, cold rolled, medium plate) fluctuated slightly, and the inventory increased with the decline in consumption. In addition, the market has no macro good release, the early good has been gradually digested, and the market is expected to have a strong accumulation of steel in the off-season, resulting in pressure on the raw material market.
Fourth, coking coal futures prices continue to decline, eroding the confidence of the spot market. As market expectations have been falling, other sectors are weak, and the "black" price is also falling. Based on the above points, coking coal futures prices began to fall after rising to a stage high at the end of May. On the one hand, the supply of coking coal is stable, and the price is difficult to be driven by a strong rise; On the other hand, the market is expected to decline in terminal demand, that the steel inventory will form pressure on raw materials, and the market is particularly concerned about the reduction of crude steel this year, and the negative side of raw materials continues to be released. Futures prices continue to fall, to some extent restraining the spot market sentiment.
However, after entering late June, coal prices did not continue to fall, and most coal prices maintained stable operation. The main factor supporting coal prices have not continued to fall is from the demand side. On the one hand, coke spot supply and demand to maintain a tight balance, although the coking plant to maintain high load operation, but the downstream steel raw material inventory is low. In the case of high operating rate of steel mills, the demand for coke is not reduced, and some steel mills still have the phenomenon of urging goods. Coke increase expectations continue to heat up, forming a bottom for the spot market of coal coke. On the other hand, the steel inventory did not continue to accumulate in the off-season, and there is a small amount of storage, and the market's pessimistic expectations are not further released. With hot metal production rising to high levels for the year, raw material demand is still in place. Due to the variables on the demand side, the demand has improved slightly, the online auction flow of coking coal has decreased, the inventory pressure at the pit has eased, and the quotation of some high-quality coal has been firm.
The trend of the coking coal market in July needs to be analyzed from the following aspects.
From the supply point of view, there is room for further increase in the follow-up coking coal supply. Some coal mines that have stopped production and limited production have returned to normal, and production has slowly rebounded. The number of imported Mongolian national coal clearance vehicles is expected to remain high, but due to the low domestic coal prices and the high inventory in the port supervision area, the number of customs clearance vehicles continues to increase, or it is difficult to stabilize at about 1200 vehicles per day. The advantage of imported seaborne coal is still there, which will support the amount of seaborne coal arriving at the port to maintain a high level.
From the demand point of view, the demand for raw material replenishment of downstream enterprises is expected to maintain the status quo or increase slightly. Coke spot supply and demand still maintain a tight balance, steel raw material inventory is low, continue to reduce the price of purchasing power is not strong, short-term coke increase probability of fluctuation, coke enterprises immediate profit recovery, follow-up if coke continues to produce and sell, corresponding coking coal replenment rhythm will also be accelerated. The operating rate of steel mills remains high, and recently there are new maintenance and resumption of production, and it is expected that the output of hot metal will fluctuate slightly. At present, the stock of raw materials in steel mills is low, the steel has not exceeded the expected accumulation of the situation, and the production of molten iron in steel mills continues to remain high to ensure sufficient inventory when the peak season arrives. It can be seen that the downstream coking steel enterprises are still in demand for coking coal.
From the inventory point of view, the current domestic coking coal inventory is at a low level, the inventory pressure at the mouth of the pit is small, the downstream available days are low, and the intermediate trade speculation inventory is not high. As the fundamental contradiction between coking coal supply and demand is not large, the inventory is expected to remain at a low level.
From the price point of view, at the end of June, coal prices remained stable, and July is expected to be stable and strong. The main reason to promote the price rise is that the downstream just need to perform well, the overall low inventory, demand or will continue to release. Since the beginning of this year, the coking coal market is mainly dominated by the demand side of the market, as long as the downstream demand is still there, coal prices will have a bottom support.