The game of coal, coke and steel industry chain is intensifying. Affected by the correction of international bulk commodity prices and the sluggish domestic terminal demand, the prices of black-based bulk commodities continued to fall, and the losses in the steelmaking and coke industries further expanded. At present, the distribution of profits in the industrial chain is uneven, the middle and lower reaches of the enterprise suffer serious losses, and the profits flow to the upstream. An authoritative person in the industry said: “The profits of the industrial chain are now mainly concentrated at the coking coal end, and steel companies are forcing the price of coking coal to lower by raising and lowering coke.”
Cailian News reporter learned from the industry that the price of raw materials has gradually loosened, and many steel mills in the north of coking coal have jointly carried out a third round of coke reduction, and the price has been reduced by 200 yuan / ton. big. At the same time, iron ore prices fell back to within the previous expectations of some long-process steel companies.
Steel enterprises have serious losses and want to force coking coal to cut prices
In the first half of the year, the prices of main raw materials such as coking coal, coke, and alloys rose sharply year-on-year, and the price of iron ore remained high, and the production costs of steel enterprises remained high; at the same time, the downstream demand in the industry was weak, and steel prices continued to fall. Since January, it has fallen into the quagmire of production losses. At present, the loss per ton of steel of billet production enterprises has widened to more than 400 yuan.
The performance of listed steel companies in the first half of the year fell sharply year-on-year, and some steel companies suffered serious losses. Ansteel predicts that the net profit attributable to the parent in the first half of the year is 1.7 billion yuan, a year-on-year decrease of 67.37%; Linggang Steel predicts that the company’s net profit attributable to the parent in the first half of the year is 131 million yuan, a year-on-year decrease of 82.90%. In addition, a number of listed steel companies have issued pre-loss announcements. Among them, Anyang Iron and Steel is expected to lose 750-950 million, Xining Special Steel is expected to lose 400-600 million, and Liugang Steel is expected to lose 950 million.
On the one hand, steel companies strengthen internal management and reduce costs to survive, and some steel mills even choose to overhaul “hibernation” in advance; on the other hand, they repeatedly put pressure on upstream to transmit production cost pressure upwards.
The price of coke has dropped by 500 yuan per ton after the previous two rounds of lifting, and the price of metallurgical coke in Tangshan was reported at 2900 yuan per ton. Most of the coking enterprises lost production and stopped work for maintenance. The market demand for coking coal began to decrease, and the tight supply and demand situation showed signs of easing. Today’s think tank coking coal chief analyst Jia Na told the Caixin reporter: “This round of price cuts has little to do with the fundamentals of supply and demand. Now the inventory of coke and coking coal is low in all aspects, and the price reduction is mainly a chain reaction caused by losses in steel mills.”
A manager of a coke production enterprise in Xingtai told the Financial Associated Press: “This year is the worst year for the market. The company has never lost money in production for nearly 20 years since it opened, but it is no longer profitable. Possibly more.”
“Now both steel companies and coke companies are losing money, while coal companies’ profits are more than 1,000 yuan per ton, and the profits of the entire industry chain are all on coking coal. If it wasn’t for self-generating power from coke oven gas, we would have lost money now. ‘ said the person mentioned above.
Liu Huajie, the person in charge of Tangshan Yuexin Iron and Steel, told the Financial Associated Press: “At present, coke companies have basically lost all their losses if they only look at the coke business. Now they are mainly supported by the profits of by-products and their downstream products.”
At present, the price of coking coal has dropped from around RMB 3,300/ton last month to around RMB 2,700-2,800/ton. In addition, some steel mills in Shandong, Shanxi, Tianjin, Hebei and other places have jointly carried out the third round of coke reduction, and the price has been reduced by 200 yuan/ton.
The analyst told the Financial Associated Press: “With the third round of coke promotion and decline, the loss of the coking industry has further deepened. At present, the loss of coking enterprises has reached the largest level in the past six years. Not high, coal mine shipments are average.”
A person from a coking enterprise in Henan believes that this round of coke price cuts may reach more than 1,000 yuan, and the coke prices will fall and the coke enterprises will lose more, which will affect the coking coal demand, and the coking coal market price will also decline.
Iron ore continues to fall close to steel mills’ expected price
In terms of iron ore, the market price has continued to decline recently. Yesterday, the main domestic iron ore contract fell by more than 10%. An industry insider said: “This time, the steel mills have succeeded in forcing the price of iron ore raw materials to drop, but it is also ‘killing a thousand enemies and losing eight hundred’.”
Due to the relatively loose supply and demand structure, iron ore performance is weaker than other black-based bulk products. From the perspective of demand, the current terminal consumption of finished steel products is still sluggish. The inventory of steel billets in Tangshan has exceeded one million tons, while steel mills continue to lose money and actively maintain and reduce production. . On the supply side, the total shipment volume of Australia and Brazil continued to rise, especially the rapid increase in shipment volume in Australia. Domestic iron ore production is expected to increase, overseas arrivals to ports have increased, and port dredging volumes have fallen, and port inventories may continue to accumulate. .
Tangshan Huangchao Business Manager Qiao introduced to the reporter from the Financial Associated Press that the current steel mills have poor profits, and in order to save costs, they prefer to use sintered ore. ton-year low level during the year.
Manager Qiao believes that in addition to the lack of terminal demand and the impact of the Fed’s interest rate cut, rumors of real estate supply cuts in various places also have a certain impact on the market. At the same time, the news of the establishment of China Iron Ore Group, which was rumored in the market yesterday, under the situation of weak and downward market conditions, There was also some emotional impact.
After yesterday’s sharp drop, the price of iron ore is now close to the cost of non-mainstream ore, and the pressure on iron ore at the raw material end may be eased by steel companies in the short term. Liu Huajie told the Financial Associated Press: “Now the iron ore spot has dropped to less than 700 yuan / ton, the corresponding index is within 100 US dollars, the price has been within the early expectations of some long-process steel companies, and some steel mills may already have procurement plans. .”
Liu Huajie told a reporter from the Financial Associated Press: “After this fall, the supply and demand structure of finished materials and raw materials has improved to a certain extent. In the early stage, the market pattern was oversupplied, but now it has gradually become weaker in both supply and demand, and the market has entered a process of slowly destocking, because The market price is low, and some funds may start to hunt for the bottom.”