Coke period price continues to be highly volatile operation in the short term

February 25 ~3 1st, Coke futures main contract J1905 prices are volatile trend, the main reasons are two: first, the seventh round of China-US economic and trade high-level consultations have made progress, the economic situation is stable to better, to boost commodity prices, and the second is the production of finished steel end volume increased significantly, terminal demand began to accelerate the start. Coke Futures main J1905 contract K chart shows that the daily line is in the upward trend, the weekly line is in the long-term upward trend.

Taken together, the short-term trend of J1905 contract is intact, and into the medium-term upward trend, the long-term upward trend is intact, it is expected that in the short term will be the main shock bias operation. Coke Supply, Coke company capacity utilization rate slightly increased last week. Affected by weather pollution, Shanxi, Hebei and other regions of environmental protection production restrictions strength increased, coke enterprise start-up rate as a whole in the top of the downward trend. According to relevant agencies, as at March 1, production capacity of less than 1 million tons of coking plant construction rate of 74%, a decrease of 0.18%, the production capacity of 1 million tons of ~200 tons of coking plant construction rate of 76.29%, The ratio increased by 0.39%, and the start rate of coking plants with a capacity greater than 2 million tons was 83.28%, an increase of 0.49%. As the shipping situation improved, the stock of coke companies declined significantly. After the success of the first round of price increases, the profit margins of coke Enterprises expanded further.

Higher profits have stimulated the enthusiasm of coke companies to produce, and the supply side is expected to be relatively stable in the short term. In terms of Coke demand, the utilization rate of blast furnace capacity was relatively stable last week, but the ratio of blast furnace start rate to coke oven start-up rebounded. As at March 1, 163 steel mills nationwide blast furnace start rate of 65.75%, the same level. Port inventory in the same period in recent years high, traders speculation is stronger, procurement enthusiasm is still high. Stock levels recovered slightly after the steelworks patched up the warehouse.

Last week, terminal demand recovered significantly and demand is expected to move further in the later stages. On the macro side, the office of the United States Trade Representative announced that the import of self-China imports with tariffs from September 2018 will not increase the imposition of tariff rates until further notice.

The disturbance of Sino-US trade dispute to China's economic development will gradually subside.

To sum up, China's economic stability to a good development is conducive to the promotion of commodity prices, coke supply end is relatively stable, demand growth hit bottom rebound, it is expected that in the short term J1905 contract will be volatile and strong operation.

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