Environmental tightening expectations are still in the coke period price short-term will fluctuate in the range

June 10 to June 14, coke futures main contract J1909 price followed the trend of high unilateral decline, the main reason is that downstream demand side steel mill profit compression serious, spot prices in the fourth round of rise fell, coke enterprises, steel mills inventory showed signs of recovery, supply and demand relations weakened

　　Second, the sharp rise in iron ore prices led to the upward trend in coke prices, but the port low-cost inventory on the face of severe suppression, the phenomenon of high and falling back.

　　Taken together, the medium-term upward trend of coke prices remains unchanged and is either short-term or continues to adjust. On the coke supply side, the relaxation of some coke enterprises by environmental inspectors in North China led to a small rebound in the rate of coking enterprises, this week is the shanxi policy plan issued time node, environmental protection policy is still expected to tighten. As of June 10, according to statistics from relevant institutions, the utilization rate of sample capacity of 100 independent coke companies in China was 81.44 percent, up 0.62 percent month-on-month. Coking plant inventory rebound phenomenon, coking enterprise profits have been close to the profits of steel mills, coking enterprises production enthusiasm is very high, Shandong, Inner Mongolia, individual areas of the downstream has not received goods, sales have weakened signs.

　　It is expected that the supply side will remain high in the short term, inventory or continue to accumulate, after the market is concerned about the shanxi region environmental policy requirements changes. In terms of coke demand, recently, steel mills have been less likely to be disturbed by policies, and blast furnace operating rates have remained relatively high. As of June 10, the opening rate of blast furnaces at 163 steel mills nationwide was 71.13 percent, down 0.28 percent month-on-month, and demand was still at a high level.

　　Port traders shipping intention increased, port, origin prices upside down, traders' willingness to pick up goods is low, downstream steel mills profit compression is obvious, steel mills may reduce inventory levels, demand is expected to remain strong in the short term but there is a risk of decline. On the macro side, the economic data for May were not positive, with fixed asset investment growth continuing to decline, falling 0.5% month-on-month to its lowest level since October 2018. The growth rate of private fixed asset investment decreased by 0.2 percentage points month-on-month.

　　Real estate investment growth and new construction area are falling, commercial housing inventory continued to decline. In summary, the relatively pessimistic performance of macroeconomic data or the upward pressure on black commodity prices. Coke environmental protection policy is still expected to tighten, coke in the short term will maintain high supply, demand in the short term to maintain strong but there is a downside risk, high port inventory led to greater upward pressure, it is expected that in the short term J1909 contract will be mainly range shocks.

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