Minmetals Futures: The fundamental factors supporting a significant rebound in coking coal and coke prices in the short term are still insufficient.

Compared to sectors with larger early gains such as precious metals and non-ferrous metals, the persistently weak black sector faces relatively lower pressure. The retreat of funds previously allocated to non-ferrous metals and short positions in black metals is still expected to support black sector prices to some extent. Additionally, against the backdrop of ongoing disruptions in energy transportation, some countries are experiencing significant shortages of oil and gas, which may transmit upward to energy-related transportation (and freight), mining, and other supply chains, leading to the diffusion of supply-side issues from oil, gas, and fertilizers outward, while also passing high crude oil costs externally. From this perspective, under the continued high oil prices, the “energy substitution” attribute of coal may still attract funds, providing phased support for coal prices, but this also means paying attention to changes in crude oil prices, especially the potential for coal’s “premium” to be eroded when oil prices weaken. From the product-specific perspective, the static supply and demand structure for coking coal and coke remains relatively loose in the short term: coal supply recovery, high-level shipments of Mongolian coal, profit recovery in coke driving supply increases, and the slow pace of blast furnace restart all contribute. On the positive side, downstream players are partially stockpiling in anticipation of concerns over coal’s energy attributes, and the continued seasonal destocking of steel inventories temporarily alleviates market worries about steel supply pressures. Overall, we still believe that the fundamental factors supporting a significant short-term price rebound are insufficient. Moreover, the current price of around 1200 yuan/ton for coking coal is not considered undervalued in our view, and the abnormally high open interest in non-main contract positions suggests a risk of “bad positions,” with the May contract facing considerable delivery pressure. Therefore, we tend to recommend short-term trading or a wait-and-see approach, closely monitoring Middle East developments and crude oil price movements. In the medium to long term, we remain optimistic about coking coal prices, but we prefer the period between June and October rather than the present. (Minmetals Futures)