Coking coal will start a wave of rally

After the price of coking coal ** stood firm at 800 yuan/ton, it changed its previous trend and began to rebound. The main contract price of 1409 rose more than 2% on April 3 and April 4 and reached 900 yuan on April 8. T, it has become one of the fastest-growing ** varieties.

Three stimulus measures to boost the market The executive meeting of the State Council held on April 2 clarified three economic promotion measures, including the role of development finance in supporting the transformation of shanty towns, and determined the deepening of the reform of the railway investment system and the acceleration of railway construction. Policies and measures to study and expand the scope of implementation of the preferential income tax policy for small and micro enterprises. Among them, railway investment reform measures include the establishment of railroad development with an annual scale of RMB 200-300 billion; innovation in the issuance of bonds and methods for railway construction, the issuance of 150 billion yuan to the public this year, implementation of preferential tax policies for railway bond investment Guide banks and other financial institutions to actively support railway construction and expand the scale of social capital investment.

The two measures of shed change and railway construction will directly stimulate demand for steel, which in turn will drive the demand for coking coal and coke, while expanding preferential policies for small and micro enterprise income tax will involve the entire real economy. These three measures to stimulate domestic demand have become the most important factor in pushing the recent coal-coking steel market bottoming out.

The economic growth is less than expected, the government or the introduction of easing policy macro data will be announced in the first quarter, in the current published manufacturing PMI, industrial added value, exports and other data generally underperforming conditions, agencies generally believe that China's first quarter GDP growth fell To 7.5% or less is a high-probability event, and the predicted value of multiple agencies is between 7.2% and 7.4%. Citigroup’s latest estimate is that the Chinese authorities will restart the use of credit easing measures to cope with the slowdown in economic growth. HSBC believes that if the Chinese government does not respond from the policy level, I am afraid the GDP growth rate will decline to 7.0%, or even lower levels of risk.

Li Keqiang, Premier of the State Council, said that China’s economic development this year has generally begun steadily. According to the tasks set out in the “Government Work Report,” relevant effective measures have been gradually introduced. We have the ability, confidence, and conditions to keep the economy running at a reasonable level. Interval. This position has given the market a "centering pill," and the market's expectations for the future of China's economy and policies have clearly improved.

The steel market continues to improve, and the spot recovery of coal coke is expected to start from the end of March. Due to the warming of the weather, the construction site construction has been fully carried out, steel demand has gradually entered the peak season, and spot steel prices have continued to rise slightly. As of April 8, the price of tertiary rebar in Shanghai was 3,260 yuan/ton, which was RMB 90/ton higher than March 25, or 2.8%. In general, the rise in coke prices lags behind the rise in steel prices by about two weeks. Coking coal prices further lag behind. Coking prices have risen for about two weeks. Therefore, the spot market for coking coal is expected to gradually stabilize in the near future and brewing a slow rising market.

Taken together, under the current favorable market sentiment, favorable policies gradually introduced, and multiple favorable news that steel consumption has entered the peak season, coking coal is expected to start a wave of rally, which is expected to rise to 940 yuan/ton in the short-term.