Core Viewpoint - The recent fluctuations in coking coal futures indicate a potential rebound in coking prices, driven by supply constraints and steady downstream demand, despite some steel mills experiencing profit declines [6] Supply - As of September 25, the average daily coking coal production from independent coking plants was 663,000 tons, a week-on-week decrease of 4,000 tons [3] - The total coking coal production from 247 steel mills was 464,000 tons per day, also down by 2,000 tons week-on-week, leading to a total production of 1,128,000 tons per day, a decrease of 6,000 tons week-on-week [3] Demand - The average daily pig iron production was 2,423,600 tons, an increase of 13,400 tons week-on-week [4] - The blast furnace operating rate was 84.45%, up by 0.47% week-on-week, while the capacity utilization rate for pig iron production was 90.86%, an increase of 0.50% week-on-week [4] - The profitability rate for steel mills was 58.01%, down by 0.86% week-on-week [4] Inventory - As of September 25, the total coking coal inventory was 9.816 million tons, an increase of 97,000 tons week-on-week [5] - Independent coking enterprises held 630,000 tons of coking coal inventory, a decrease of 34,000 tons week-on-week, while the inventory at 247 steel mills was 6.613 million tons, an increase of 166,000 tons week-on-week [5] - Port inventory stood at 2.573 million tons, down by 35,000 tons week-on-week [5] Price Trends - As of September 25, the main coking coal futures contract (2601) rose by 30.0 (+1.73%) to 1,760.0, while the far-month contract (2605) increased by 29.0 (+1.55%) to 1,900.0 [1] - The price of premium wet quenching metallurgical coke in Lüliang was reported at 1,240 yuan/ton, unchanged from the previous day, while the trade price in Rizhao was 1,490 yuan/ton, an increase of 40 yuan [1][6] Market Outlook - The recent price adjustments by major steel mills, with a cumulative reduction of 50/55 yuan/ton, have led to expectations of a gradual rebound in coking coal prices, potentially allowing for 2-3 rounds of price increases [6] - The steel industry is under pressure to control production capacity and reduce pollution, with a focus on the actual implementation of these measures in Shanxi province [6] - The market is advised to monitor the fluctuations in the steel market and the fulfillment of seasonal demand expectations during September and October [6]

Core Viewpoint - The prices of coke and coking coal have shown a fluctuating upward trend since early July, driven by a stable and improving supply-demand structure, with investors advised to look for buying opportunities during price corrections [1][3]. Supply and Demand Dynamics - The majority of coke is used in the iron-making process of steel production, making it essential to monitor changes in pig iron output and national blast furnace capacity utilization rates. In the first half of the year, national pig iron output reached 43.2681 million tons, a year-on-year increase of 2.2%, indicating expanding demand for coke [2]. - National blast furnace capacity utilization rates have been rising, from a low of 72.67% at the end of February to a peak of 79.77%. Although there was a slight decline in July due to compressed profits, the impact on coke demand was limited, with rates rebounding to 79.49% by the end of July [2]. Supply Side Changes - In the first half of the year, national coke production was 43.2681 million tons, a year-on-year decrease of 2.5%, indicating a slight contraction in supply. The capacity utilization rates of 100 coke ovens remained stable, ranging from 79.81% to 80.00% over the past four weeks [3]. Inventory Levels - As of the end of July, independent coke plant inventories totaled 470,100 tons, up from 385,900 tons at the end of June. Port inventories were at 2.65 million tons, down from 3.005 million tons before the Spring Festival. Steel mill inventories also increased to 4.9228 million tons from 4.6382 million tons [4]. - The accumulation of inventory is not significant, with the increase in upstream and steel mill inventories being offset by a decrease in port inventories. This limited accumulation has a minimal negative impact on prices [4]. Futures Market Insights - The fundamentals of the coal and coke market remain strong, providing upward price support. However, the current futures prices may be overvalued, as the coke 2009 contract is trading above 2,000 yuan per ton, while the port spot price is around 1,900 yuan per ton [5][6]. - The ratio of coke to coking coal contracts is at 1.63, indicating a historically high level of profitability in the coking sector, which also suggests potential overvaluation of coke futures prices [6].