Core Viewpoint - The recent fluctuations in coking coal and coke futures indicate a complex market environment, with price adjustments and inventory changes impacting profitability and production levels across the industry [6]. Supply - As of October 30, the average daily production of coke from independent coking plants was 646,000 tons, remaining stable week-on-week, while the average daily production from 247 steel mills was 462,000 tons, showing a slight increase of 100 tons [3]. Demand - The average daily pig iron production was 2.3636 million tons, reflecting a decrease of 35,400 tons week-on-week. The blast furnace operating rate was 81.75%, down by 2.96%, and the capacity utilization rate for ironmaking was 88.61%, down by 1.33%. The profitability of steel mills was at 45.02%, a decline of 2.60% [4]. Inventory - Total coke inventory reached 9.588 million tons as of October 30, an increase of 62,000 tons week-on-week. Independent coking plants held 599,000 tons, up by 12,000 tons, while steel mills had 6.291 million tons, down by 41,000 tons. Port inventory was at 2.699 million tons, increasing by 91,000 tons [5]. Profitability - The average profit per ton of coke for 30 independent coking plants was -41 yuan, with regional variations: Shanxi at -44 yuan, Shandong at 20 yuan, Inner Mongolia at -101 yuan, and Hebei at 5 yuan [2]. Market Dynamics - The recent third round of price increases for coke was implemented on November 5, with expectations for further price adjustments due to rising coking coal prices providing cost support. However, environmental restrictions in regions like Tangshan and Shanxi have led to reduced pig iron production, exerting pressure on coke prices [6].

Core Viewpoint - In October, domestic coke prices showed a strong upward trend due to tight coking coal supply and increased demand from downstream steel mills for inventory replenishment. However, as steel mills face losses, the likelihood of continued price increases for coke in November is low, with potential downward pressure expected after mid-November [1][8]. Group 1: Price Trends - In October, domestic coke prices experienced two rounds of increases, with mainstream market prices rising by 100-110 CNY per ton, reaching 1575-1645 CNY per ton for Shanxi's first-grade dry coke by October 27, marking a 7.33% increase from the end of September [3][4]. - The primary reason for the increase in coke prices is the rise in raw material coking coal prices and strong downstream demand [4][5]. Group 2: Supply and Demand Dynamics - Coking coal supply has tightened, leading to higher prices and increased costs, which support coke prices. During the National Day holiday, some coal mines suspended operations, and post-holiday, production was limited due to environmental checks, resulting in a strong cost support for coke prices [4][8]. - Many coking plants are currently operating below the breakeven point, leading to increased maintenance and production cuts. As of October 23, the operating rate of major independent coking plants was 75.33%, down 1.71 percentage points from September's peak [4][7]. Group 3: Downstream Steel Mill Activity - The operating rate of blast furnaces in Tangshan reached 90.24% as of October 23, the highest level of the year, indicating strong demand for coke. However, due to rising coking coal prices, steel mills are experiencing reduced profits, which may affect their purchasing behavior [7][8]. - Steel mills have low coke inventory levels, with the average available days of coke inventory at 7.18 days, slightly down from early October. This low inventory level has led to active purchasing behavior from steel mills [7][8]. Group 4: Future Outlook - The cost support from coking coal is expected to continue, but the overall demand from steel mills may weaken as seasonal demand for steel decreases. The turning point for coke prices will depend on the extent of maintenance and production cuts in steel mills, particularly after mid-November [8].