Report Industry Investment Rating No relevant content provided. Core Views - In the short term, due to weak terminal acceptance and seasonal decline in demand, coal and coke prices may face adjustments. However, in the medium to long term, policies restricting over - production and safety inspections will limit the supply elasticity of coking coal. Coupled with winter storage, the downward adjustment space of coking coal spot may be limited. Coal and coke are suitable as long - positions in the black commodity sector [2]. - The recommended trading ranges are 1100 - 1350 for coking coal and 1600 - 1850 for coke. Consider taking partial profits when the prices rebound to the upper end of the ranges [2]. Summary by Directory Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - **Short - term situation**: Recent downstream restocking and reduced mine production have improved coking coal inventory. However, steel mills are in deeper losses, with more planned maintenance, leading to a decline in hot metal production and seasonal weakening of coal and coke demand. Spot valuations are considered too high, and restocking demand has peaked [2]. - **Long - term outlook**: Policies on over - production inspection and safety will limit coking coal supply elasticity. Winter storage is expected to support prices, and coal and coke can be long - positions in the black commodity sector [2]. 1.2 Trading - Type Strategy Recommendations - **Base - spread strategy**: Coking coal basis is high, and end - users with procurement plans can consider buying hedging on the futures market. Coke basis has strengthened, and no cash - and - carry arbitrage strategy is recommended [8]. - **Calendar - spread strategy**: The 1 - 5 reverse spread for coking coal is suspended. It is recommended to wait and see due to unclear reverse - spread logic [8]. - **Hedging and arbitrage strategy**: Short the coking profit on the futures market, with an entry range of 1.5 - 1.55 for the 01 coke/coking coal ratio [8]. 1.3 Industry Customer Operation Recommendations - **Inventory hedging**: Coke producers worried about price drops can short the J2601 contract, with different hedging ratios and entry ranges [11]. - **Procurement management**: Coking plants concerned about rising raw material prices can long the JM2605 contract, with different hedging ratios and entry ranges [11]. 1.4 Basic Data Overview - **Coking coal supply**: Some mining indicators such as 523 mine coking coal production and 314 coal washery production have changed. Inventory has also changed, with an overall increase in total coking coal inventory [12]. - **Coke supply**: Coke production and inventory have changed, with a decrease in total coke inventory [12]. - **Prices**: Spot and futures prices of coking coal and coke, as well as related profit indicators, have shown different trends [13][14][15]. Chapter 2: This Week's Important Information and Next Week's Events to Watch 2.1 This Week's Important Information - **Positive news**: CPI increased in October, coke prices were raised, and coking coal prices in some areas rose [17]. - **Negative news**: Scrap steel prices dropped, steel mill profitability declined, and steel consumption decreased [18]. 2.2 Next Week's Important Events to Watch - Monitor China's October M2 money supply growth rate, US October CPI, initial jobless claims, China's October retail sales, and industrial added - value [19]. Chapter 3: Futures Market Interpretation 3.1 Price, Volume, and Capital Interpretation - **Unilateral trend**: The coking coal futures main contract failed to break through the resistance level and may enter a wide - range oscillation [19]. - **Capital flow**: Coking coal long - position holders took profits, and short - positions in coke increased, indicating a cautious market sentiment [21]. - **Calendar - spread structure**: The 1 - 5 positive spread for coking coal has strengthened, and it is recommended to wait and see for the reverse spread [26]. - **Base - spread structure**: Coking coal basis is high, suitable for buying hedging. Coke basis has strengthened, with neutral valuation [32]. Chapter 4: Valuation and Profit Analysis 4.1 Industry Chain Upstream and Downstream Profit Tracking - Since July, upstream coking coal mines' profits have improved, while downstream coking and steel - making profits have deteriorated. Coke price increases have not significantly improved coking profits, and steel mills are reluctant to accept further price hikes [44]. 4.2 Import and Export Profit Tracking - Mongolian coal long - term contract trade profits have recovered, and customs clearance has increased. Seaborne coal import profits have improved, and coal shipments are expected to remain high [46][49]. Chapter 5: Supply - Demand and Inventory Projections 5.1 Supply Side and Projections - Coking coal production growth in the fourth quarter is limited, with an estimated weekly production of 960 - 965 tons in November. Import supply is expected to remain high, with an estimated net import of 980 - 1000 tons in November [63]. - Coke production is expected to be 763 - 767 tons per week in November, and exports are linearly extrapolated [65]. 5.2 Demand Side and Projections - Due to shrinking steel mill profits, the estimated daily hot metal production in November is 230 - 232 tons [68]. 5.3 Supply - Demand Balance Sheet Projections - Coking coal and coke supply - demand balance sheets show changes in production, imports, supply, and inventory over different weeks [70].