It is still a long time for coke enterprises to reduce losses and eliminate backwardness in the second quarter

From the point of view of the interim results just disclosed, the second quarter results of coke enterprises have improved. According to the introduction of coke enterprises, the recent steel market has picked up, it is expected that coke prices will also have room for growth in the second half of the year, eliminating outdated production capacity will also ease the coke industry Excessive competition. However, industry analysts believe that the elimination of backwardness is a long-term task. In the short term, the fundamentals of the industry will hardly be fundamentally improved. Follow-up will focus on companies with potential coal resources and the ability to extend the industrial chain to deepen the processing of products.

Significant loss reduction in the second quarter

According to Wind statistics, coke processing listed companies classified according to Shenwan industry have realized total operating revenue of 7.198 billion yuan in the first half of this year, an increase of 78.39% from the same period last year's 4.35 billion yuan; and gross profit of 2.09 billion yuan, while last year gross margin was negative. . In the first half of this year, the cumulative loss of listed companies in the coke processing sector totaled 380 million yuan, a decrease of 160 million yuan over the same period of last year.

From a single quarter point of view, the second quarter of this year, coke processing listed companies also significantly reduced losses compared with the first quarter. In the first quarter, the cumulative loss was 235 million yuan, which fell to 145 million yuan in the second quarter and reduced losses by 90 million yuan.

“Our company has reduced losses by two-thirds from the first quarter in the second quarter. Now the market is getting better,” said Antai Group (600408), who was interviewed by the China Securities Journal. Antai Group had a total loss of 56.19 million yuan in the first half of this year, of which the first-quarter loss reached 41.64 million yuan, while the second-quarter loss dropped to 14.547 million yuan. The only continuously profitable coke company, Sichuan Shengda (000835), earned 1.59 million yuan more than the first quarter of the second quarter.

Industry sources told the China Securities Journal that recently the downstream steel prices are gradually recovering, and optimistically, there is room for further coke prices to rise. At the end of June this year and early July of this year, coke prices in various parts of the country were frequently lowered, with a cumulative drop of around RMB 100/ton. In July, the downstream demand for steel was still weak. The steel mills suffered heavy losses. Small and medium-sized steel enterprises were still in the 40% or so limited production, and the demand for coke was also small. By the end of July and early August, the market began to improve. Starting from the Hebei coke enterprise, domestic coke prices rose slightly. The resumption of production at some small steel mills also increased the demand for coke.

In fact, compared with the same period of last year, coke prices did not drop significantly in the first half of the year. However, under the influence of limited production of steel mills, the demand for coke was reduced, the production capacity was limited, and the increase in coking coal prices in the first half of the year exceeded the increase in coke prices. As a result, coke has continued its loss-making situation in the entire industry.

The year will continue to suffer losses

Looking at the situation in the first half of the year, with the exception of Sichuan Shengda, four of the five companies involved in coke processing are losing money, and these four companies suffered losses last year. From this point of view, if the second half of the year can't turn a deficit, there will be more coke processing listed companies that are "ST."

However, even in the face of a relatively good market at present, people in the coking coal enterprises are still under-enjoyed in turning losses around the year. "We hope to try our best to make up for losses," said a business person. However, analysts believe that the temporary warming of the coke industry does not mean fundamental changes. "The serious overcapacity has always been the biggest problem faced by this industry. The strength of the upstream coking coal companies and the pricing power of the downstream steel companies have made coke enterprises very sad."

The analysis of BOC International believes that due to the fact that coking coal is still being destocked, the demand for coking coal has increased less, so coking coal prices have not risen, but there is not much room for coking coal prices to fall.

For the coke industry to eliminate backward production capacity, analysts believe that this will be a long-term work, in the short term it is difficult to change the current situation of coke enterprises. However, the person also said that in the face of possible consecutive losses, coke enterprises will certainly take certain measures to inject coal assets or develop downstream deep processing. “As Aetna Group, we can pay attention to their progress in the integration of Shanxi's coal resources; the potential of deep-processing companies such as the Kailuan Group is relatively large.”