Looking back at the coke market in 2023, the overall focus is shifting downward. In the first half of the year, under the pressure of cost collapse and downstream active destocking, coke showed a significant trendIn the second half of the year, as the profits of steel mills improved, downstream demand continued to be at a high level, along with the replenishment demand released by steel mills under low inventory, coke out of the upside, fluctuating between 100-300 yuan tons. In the context of overcapacity of coke this year, the core of the change lies in the upstream cost changes and the negative feedback pressure of downstream steel mills.
1. **Trend.
As far as the first half of the year coke weakened, the first quarter was relatively stable, after the beginning of the year by 100 yuan tons, it entered a stage of stability, after the second quarter, with the weakening of steel and coal prices, the coke price entered the rapid stage, taking HBIS wet quenching coke as an example, a total of 850 yuan tons in the first half of the year, during which there was no occurrence. In the second half of the year, coke was adjusted upward, coal prices drove coke prices, low inventory decisions were limited in adjustment space, coke in the third quarter was 500 yuan tons, 100 yuan tons, coal prices were still high in the fourth quarter, the impact of safety inspections on coking coal was still long-term, and the toughness of coke under cost support was still there, as of December 30, coke in the fourth quarter was the same, 300 yuan tons, 100 yuan tons, and a total of 600 yuan tons of coke in the second half of the year. According to the MySteel Coke** Index, the coke index at the end of December 2023 was 25025 yuan tons, down 13 percent year-on-year03%, compared to the end of June 2023**3257%。
2. **Situation.
Although there is an excess of coking capacity, it does not mean that there will also be a surplus of coke production. Coke enterprises will independently adjust the pace of production according to the profit situation, and the overall output will match the blast furnace consumption of steel mills, according to the data of the Bureau of Statistics from January to November 2023, the national coke output is 4500 million tons, an increase of 327%。National pig iron production from January to October 8100 million tons, an increase of 248%。Since last year, the impact of external factors on the production of enterprises has been significantly reduced, and the production load of enterprises is basically determined by their own profits, affected by downstream demand and profits, the overall output of coke has maintained a slight increase, and it is expected that the output of coke in 2023 will be 4900 million, of which the output of metallurgical coke is 4about 4.7 billion, an increase of 10 million tons year-on-year.
Data**: Ganglian data.
This year's coke production fluctuations are significantly smaller than in previous years, first of all, coke demand continues to be high this year, even in the process of coke price reduction, its actual demand reduction is relatively general, high demand to maintain a high level of coke. Secondly, coking capacity is excessive, in the context of production affected by the profit margin, as long as the coke enterprises are given enough profits, coke will be surplus, and the excess is destined to not have high profits, and this year's Mysteel survey statistics of the national coke enterprises average coke profit of 3 yuan per ton, which also confirms this point of view. Coke enterprises with low profits will suppress their own production enthusiasm, and at the same time, coke enterprises near breakeven will not have large-scale concentrated production reductions, resulting in relatively stable output of coke enterprises this year. In addition, the coking capacity is sufficient, even if there is a centralized coking capacity elimination event, there will soon be other production capacity to make up for the elimination of the amount, which may cause a short-term mismatch between coke supply and demand, but the time for this supply and demand mismatch must be very limited. At the end of October this year, Shanxi concentrated on eliminating 4The production capacity of 3-meter coke oven is 15.3 million tons, which has not caused a significant decline in the actual output of coke, and the supply and demand of coke are in a tight balance.
3. Demand.
At the beginning of 2023, the voice of the crude steel reduction policy came out again, and in mid-May, the Development and Reform Bureau of Fengnan District, Tangshan City, issued the "Notice on Doing a Good Job in the Reduction of Crude Steel Production in 2023", which required all iron and steel smelting enterprises to reasonably formulate annual production plans, increase crude steel output reduction, ensure that the annual crude steel output does not exceed last year, and ensure the completion of the annual crude steel reduction task. With the economy and market demand, the sound of production reduction has faded, and the output is mainly adjusted by the market, and the output is high year-on-year. According to the statistics bureau, China's crude steel output from January to December 2023 was 102.2 billion tons, a year-on-year increase of 09%；Pig iron production 87.8 billion tons, a year-on-year increase of 14.5 million tons, a year-on-year increase of 17%；The converted coke consumption increased by about 6.5 million tons.
Data**: Ganglian data.
4. Inventory.
As of December 29, the total coke inventory (247 steel mills + all sample independent coke enterprises + 4 major ports) surveyed by MySteel was 861820,000 tons, a year-on-year decrease of 13060,000 tons. From the perspective of inventory structure, the coke inventory of all independent coke enterprises is 81210,000 tons, an increase of 2 year-on-year160,000 tons;247 steel mills have an inventory of 611180,000 tons, a year-on-year decrease of 5070,000 tons;The coke inventory of the four major ports is 169430,000 tons, an increase of 5 percent year-on-year830,000 tons.
Data**: Ganglian data.
The total coke inventory in 2023 will be at a low level, especially because of the low profits or even losses of steel mills in the past two years, resulting in the coke inventory of steel mills being at a low level from 2022, showing a downward trend as a whole. This year, the coke inventory of some mainstream steel mills has been repaired compared with last year, and the actual procurement of steel mills has not encountered obvious pressure, and the overall coke supply and demand this year are relatively balanced. In addition, Shanxi 4 in October this yearThe withdrawal of 3-meter coke oven production capacity has also led to a decline in the coke inventory of steel mills, and the phased mismatch between supply and demand has caused the inventory of individual steel mills to fall, but with the release of the replacement coke production capacity in the later stage, the coke inventory of steel mills has gradually recovered.
1. **Situation.
In 2024, production capacity is not a factor restricting the release of coke production, and the problem of coking overcapacity still exists next year, Mysteel research is expected to eliminate 16.65 million tons of coking capacity in 2024, an increase of 30.71 million tons, and a net increase of 14.06 million tons. In the absence of mandatory interference from external factors, coke enterprises will adjust their production independently, and the overall coke output in 2023 will match the blast furnace consumption of steel mills, and the coke output will remain the same in 2024. Global pig iron production is expected to increase in 2024, but the increase is mainly overseas, domestic steel demand has risen slightly, exports have declined, and considering that the amount of scrap steel consumption may increase next year, pig iron production is expected to be relatively flat or slightly increased. In 2024, global pig iron production will increase, mainly overseas, domestic steel demand will rise slightly, exports will decline, and considering that the amount of scrap steel consumption may increase next year, pig iron production is expected to increase slightly.
Looking forward to 2024 coke**, coking capacity changes will not restrict the release of coke output, considering that coke enterprises will take the initiative to reduce production under low profits, downstream consumption will increase slightly, coke output is expected to increase slightly, the overall output is estimated to increase by about 3 million tons, coke capacity utilization rate of 77%, next year coke capacity utilization rate will decline by 1 percentage point under the pressure of loss.
2. Demand.
The downstream demand for coke in 2024 is a year full of uncertainty, although the new blast furnace plans to put into operation more iron production capacity next year, but the "double carbon" task and the slowdown of downstream demand will bring uncertainty to the commissioning time and intensity of the new blast furnace, and the demand for coke will also be greatly reduced.
Profits and demand have become the main constraints on the start of steel mills, and domestic demand will become the main growth point of demand next year under the stimulus of policies, and crude steel output is expected to increase slightly in 2024It is estimated that in 2024, China's blast furnace pig iron output will increase by about 3 million tons, coke demand will increase by about 1.3 million tons, and coke demand will increase slightly by 0Around 28%. Overall, supply and demand will increase in 2024, but the increase in demand will not be as high as the first increase, and coke will begin to accumulate.
3. Prospects.
Overall, it is expected that coke production capacity will continue to grow in 2024, and the overall profit of the coking industry is at a low level due to its own supply and demand tends to be loose. The range of coke is expected to be narrowed throughout the year, and the range is expected to be 2100-2600 yuan tons (Handan, Hebei Province).