The New Energy Vehicle Market Is On The Rise. The Automotive Industry Welcomes New Highs In Steel Consumption And Corporate Profits Continue To Grow.

Recently, many coking coal and coking companies have successively issued price increase letters. In terms of futures, the main coking coal contract rose from the lowest of 1,400 yuan per ton on April 1 to the highest of 1,889 yuan per ton, an increase of more than 34%, and the main coke contract also increased by 27%. What changes have taken place in the coking coal and coke industry?

 

At a coking coal company in Shanxi, the person in charge of the company said that coking coal prices have risen recently and the company's profits have improved, but daily coal mining is still going on as planned. Currently, the monthly raw coal output is around 2.8 million tons. Due to strong demand from downstream customers, the company's inventory continues to decline.

 

Since 2024, coking coal prices have shown an overall "V" shaped trend. At the beginning of the year, futures prices remained at around 1,700 yuan per ton, and rebounded after hitting bottom in early April. From the lowest of 1,400 yuan per ton on April 1, it once rose to the highest of 1,889 yuan per ton on May 7, with the highest increase exceeding 34%. Industry insiders said that coking coal is mainly used in blast furnace ironmaking, and its price depends on the prosperity of downstream steel companies.

 

Data show that in the second and third weeks of May, the average daily hot metal output of blast furnaces in 247 steel plants was 2.345 million tons, an increase of 38,300 tons from the previous month. The increase in hot metal production has boosted the demand for coking coal and coke. On the supply side, coal mining is carried out strictly according to plan. In addition, the cost of new mines is high, the construction and production cycle is long, and it is difficult for the industry to add new production capacity. Therefore, with the supply basically stable, the growth in demand will make the profits of coking coal companies better.

 

Industrial steel has grown significantly and steel mills' profits per ton of steel have increased

 

The spot price of coking coal continues to rise, and futures prices have risen by more than 30%, all thanks to the increase in hot metal production by downstream steel companies. What is the overall production and operation situation of the steel industry? Can it support the continued recovery of coking coal prices?

In a steel factory in Changzhou, Jiangsu Province, on the high-speed wire rod production line in the factory, the steel billet is heated, undergoes multiple continuous rollings, is coiled and formed by a coiler, and is then cooled, packaged and transported to the warehouse. According to the person in charge of the company, the company's Changzhou base is a production base for industrial rods and wires, and its products are mainly used in automobiles, wind power and other fields.

 

It is understood that since the fourth quarter of 2023, real estate investment and construction have been in a state of contraction, demand for construction steel has declined, steel prices have fallen rapidly, and rebar futures have fallen from a high of 4,076 yuan per ton to a low of 3,368 yuan per ton. However, since the beginning of the year, the rapid growth of industrial steel has stabilized the market demand for steel.

 

Industry insiders said that benefiting from the rise of the new energy vehicle market, the automotive industry is expected to usher in a new high in steel consumption in 2024, reaching 61 million tons, a year-on-year increase of approximately 3%. The number of domestic shipyards under construction and the number of orders on hand has also increased, and steel consumption in the shipbuilding industry is expected to also increase by about 3%. Since April, the main contract for industrial steel hot coils has risen from a low of 3,588 yuan per ton to a high of 3,890 yuan. Steel mill profits are expected to continue to grow.

 

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