In the first half of the year, China’s coking industry turned profitable
According to the latest statistics from the National Bureau of Statistics, from January to July this year, the domestic coking industry turned profitable from the same period of time. According to data from the China Coking Industry Association, from January to May, the total profit of the key businesses of more than 700 coking enterprises decreased by 86.2% year-on-year, and the losses of more than 300 loss-making enterprises that accounted for 44% of losses accounted for 6.454 billion yuan. The losses of coke enterprises in Shandong and Shanxi have reached over 80%. “In the general loss-making environment of the industry, coking companies are facing more financial pressure.†Zhang Yuan, an analyst at Zhuo Chuang, said that two-thirds of coking companies in China are independent coking companies. Most of them are Private capital is inherently inadequate in terms of financing and profitability. Independent coke enterprises have almost no right to speak in the "coal-coke-steel" industrial chain, and their raw material costs and production outlet sales prices are determined by the upstream and downstream companies. The reduction in steel demand directly led to the drop in steel prices. Steel mills lowered their coke purchasing prices in order to protect their own profits, and coal mines were reluctant to cut the price of coking coal, causing the profit margin of coke enterprises to be extremely limited by the “splints†on both sides. . At the same time, the steel mills have limited funds due to their own, and the settlement is slow. This is even worse for the coking companies that are trying to survive in the cracks. “When the market price of coking coal continues to decline, the cost of coking coal purchases by large-scale coking companies is high, and the exposure of coking companies’ capital risks will be magnified,†said Tang Jiabin, a coke analyst at Everbright Futures. “Market sales are not smooth, funds cannot be effectively withdrawn, and monetary adjustment factors have made it difficult for coking enterprises to receive credit support. Some companies’ operations have become deeply bottlenecks,†said Hu Jiaoyu, a researcher at China International Futures Energy Chemicals. It is understood that at the end of 2008, 14 banks in Shandong Province provided a total of 3 billion yuan in credit to Shandong Coking Enterprises, helping the local coking enterprises to survive the difficult period. However, since the second quarter of this year, with a large number of steel traders appearing capital chain breaks, closing, running, etc., banks generally strictly control the lending intensity of the steel industry chain. Under the current economic situation, it is more difficult for Jiaoqi’s capital to be repatriated and banks’ attitudes toward their credit have also changed. A bank's credit department manager in Shandong Province admitted to reporters that the credit business of the bank’s coking companies is very cautious. His bank has reduced the new credit limit for coking enterprises below the scale (1 million tons), and has also imposed strict restrictions on the use of credit funds within the credit line, but it is only a relatively large coking enterprise’s credit policy. There are fewer restrictions, and some banks have even stopped the new credit business of coking companies. "As the difficulty of loans has gradually increased, independent coking enterprises have to increase private lending, because of higher interest rates, once the capital chain problems, companies will face closure." Tang Jiabin said. Most Jiaoqi enterprises call on the banking institutions to support the vertical or horizontal cooperation of coking enterprises from the credit side. The government should also help coking enterprises to establish green capital channels and promote the adjustment of the coking industry. “Currently, although most of the coking enterprises are still struggling to maintain their normal operations through various means, if the favorable factors in the latter period are not enough, the steel market will continue to slump, and the coke market will continue to bear tremendous pressure. For weak small and medium-sized coking companies, it is only a matter of time before the capital chain breaks, Zhang said. Luohe Tiema Rubber Products specializes in the production of various hydraulic accessories, hydraulic pumps, hydraulic motors, hydraulic valves, hydraulic components, which can be customized to meet the diverse needs of customers. Hydraulic Fittings,Hydraulic Adapter,Metric Adapter,Hose Connector Luohe Tiema Hydraulics CO.,Ltd , https://www.hydraulichosesdirect.com