Increased cost support, coke price or stage bottoming

From January 7th to January 11th, the price of the maincontract of coke futures J1905 fluctuated upwards. The main reason was that therebar price continued to strengthen to boost the price of other blackvarieties. On the other hand, some coal mines in Shandong canceled the rawcoking coal in January. The implementation of relevant preferential and pricereduction policies to enhance coking coal coke cost support expectations andpromote coke prices.

In terms of downstream demand, last week, due to the increasein the number of blast furnace production, the utilization rate of blastfurnace capacity rebounded slightly. This week, it is estimated that 5 newblast furnaces will be repaired and 10 blast furnaces will be re-produced. Theoperating rate of blast furnaces will still rise slightly. As of January 11,the operating rate of blast furnaces in 163 steel mills nationwide was 64.36%,an increase of 0.14 percentage points from the previous month. In the shortterm, coke demand has maintained a steady increase.

In summary, the macro-level positively boosts the demand ofthe terminal, the coking coal price is firmer, and the support effect of thecoke cost is increased. The coking profit will further reduce or cause thecoking enterprises to actively limit production, and the coke spot price willcontinue to decline. Futures prices are generally in the bottom of the stage.It is recommended to pay attention to the opportunity to do more on dips, butthe spot price is weak and there is further downside expectations, which willlimit the upward price of coke futures. It is expected that the range willremain volatile in the short term. The J1905 contract price is 1900yuan/ton~2000 yuan. /Ton.