Coal Rush High Fall Iron Ore Cut

"Soaring" and "plummeting" have become the main melody of the recent commodity futures market.

Under the guidance of the relationship between supply and demand and the factors of market speculation, the "three brothers of coal" composed of steam coal, coking coal and coke have soared in recent years. The iron ore on the other side continued to fall into the abyss of falling. In just a few months, it was cut off from its historical high, becoming a rare phenomenon in the current round of commodity price rise.

The rising price of coal roasts many downstream industries. The rising coking coal and coke prices continue to squeeze the profit space of downstream steel industry. The soaring price of steam coal makes cement and coal-fired power plants complain incessantly. In addition to safety and reduction of production capacity, a double control action of energy consumption around the end of the year is also quietly launched, bringing more complex impact to various industries.

Coal soars, iron ore plummets

The price of coal in recent days has attracted attention of all parties. Although the increase in recent days is relatively calm, the price is still at a historical high. The futures price of steam coal has risen to more than 1000 yuan, and there is no obvious sign of cooling down in the overall market.

As of September 17, Beijing time, the main futures contract price of steam coal has reached 1057.8 yuan / ton, previously reaching a high of 1094 yuan / ton, nearly 80% higher than a year ago; The main contract price of coking coal futures was 2693 yuan / ton, reaching a high of 3099 yuan / ton on September 10, with a year-on-year increase of more than double; The price of coke was 3218 yuan / ton, reaching a high level of 3847 yuan / ton, nearly doubling year-on-year.

In the spot market, coal supply is in short supply. Many power plants and chemical plants have no choice but to accept high prices and invest in coal rush.

On a global scale, the upsurge of commodity price rise has not subsided, including the prices of crude oil, natural gas, aluminum, copper and other products. But the first half of the year without two iron ore, but in the near future continued to plummet, out of the extremely rare market.

The general iron ore price index started on September 8 and continued to decline. By September 17, the cumulative straight-line decline of US $32.3/t, or 24.3%, occurred in the eight trading days. Based on the record high of 233 US dollars / ton set in May this year, the high price of iron ore futures has been cut off in just four months.

On September 17, the main contract of Singapore iron ore futures delivered in October once fell below $100 / T, with a intraday drop of more than 7%, the lowest level since July 2020, and the worst weekly performance of the futures in history.

As for the domestic market, as of the end of the afternoon of September 17, the main contract of iron ore had fallen to 629 yuan / ton, a decrease of 53%, which reached a new low since May 2020.

Supply and demand dominates both ice and fire

Coal, iron ore and iron and steel futures are collectively known as the black series, the first half of the collective soared. Now, because of the change of supply and demand, we have taken a completely different path.

For more than a month since the end of July, the price of coking coal futures has reached a record high, and the coal sector has risen by nearly 70%. The reason for the rise is mainly the contradiction between supply and demand in addition to the promotion of capital.

Wang Siya, senior analyst of Lange Iron and steel network, pointed out that in the first half of the year, the domestic demand for coking coal continued to grow, especially the sharp rise in steel prices, which stimulated the enthusiasm of steel production. The market demand for coke and coking coal continued to grow, and the lack of coal supply led to the price rise.

Since the beginning of this week, coal prices have fallen. On the one hand, due to the stricter policies, for example, the Dashang exchange has raised the handling fees and margin for many times, and curbed the crazy speculation by increasing the transaction cost, so as to cool down the double coke; On the other hand, the national development and Reform Commission has interviewed energy enterprises and asked them to ensure stable supply and price, especially the long-term cooperative price. Under the influence of comprehensive factors, the coal price directly turned down.

On the whole, domestic coal imports are mainly from Mongolia, Russia, Canada and other countries. As the impact of climate on coal transportation is more direct, the arrival period is uncertain. In the case of unstable supply, the current price has a certain support.

A relevant person in a large coal chemical industry pointed out to the reporter of the 21st century economic report that the price of coking coal has risen sharply recently, and the price of coke has also risen along with it. However, the cost of coking coal has greatly squeezed the profits of coke. The profit space of coke enterprises is limited, and some enterprises are on the edge of profit and loss.

On the iron ore side, the production restriction policy started in the second half of the year has been gradually implemented, which has directly impacted the market demand of iron ore, and the change of supply-demand relationship has led to a sharp drop in iron ore prices. From the policy point of view, the crude steel output in the regions where the output rose sharply in the first half of the year should be significantly reduced, while the iron and steel industry in some regions suffered from the impact of dual control of energy consumption and reduced production again on the basis of production restriction.

Wang Siya pointed out that for iron ore, the demand side production restriction still suppresses iron ore, and the incremental pressure on the supply side is fair. At present, the mood is empty, and it is difficult for iron ore to improve in the short term.

In terms of steel products, although the production restriction is becoming stricter, the landing still has certain periodicity. At present, the reduction of steel mills is general, and most of them are concentrated in individual regions, and the rest basically meet the market expectations. It is worth noting that the shortage of power resources leads to the increase of power rationing, which will affect production, which is expected to last until October, and the output will continue to decline.

Industrial policies continue to affect the market

The dramatic changes in commodity prices and the introduction of new policies have brought more complex impacts on cement, coal power, steel, coking and other industries.

Since this year, safety accidents have occurred in many places. Under the severe situation, the safety inspection work in various places has become more strict, which directly affects the production of many coal mines. Since then, the economic development and the high temperature in summer brought about a large increase in power demand, which further stimulated the growth of coal demand. Since the second half of the year, energy consumption control in many places has become more and more common.

China Power Grid said that the current fuel costs of coal-fired power enterprises have risen sharply, but it is difficult to effectively guide them to the outside world, resulting in serious losses and general difficulties in capital turnover. The state has taken key measures to collect and supply the warehouse. At present, the northeast region and the heat supply power plant are mainly used to supplement the storehouse, so as to keep the bottom line of people's livelihood. In order to control the consumption, many places began to implement orderly production policies for high energy consumption industries, and introduced energy-saving measures. The subsequent electricity and coal consumption will be significantly reduced.

At the other end, Yunnan, Guangxi, Jiangsu, Shandong, Shanxi and other places have successively defined the scope of the two high-tech industries and tightened the management of dual control of energy consumption.

Jiangsu Province, with severe energy-saving situation, has recently implemented production restriction or production suspension in cement, steel and other industries. Yunnan, Guizhou and other places have also imposed power restrictions on electrolytic aluminum and cement industries due to energy consumption control, which directly drives up the prices of local cement and aluminum.

Some cement industry analysts pointed out to the reporter of the 21st century economic report that the rise of coal price has pushed up the price of cement, and the production restriction has further intensified this trend. However, the overall market demand is not strong, showing an embarrassing situation of weak supply and demand.