"Economic half-hour": The Road of Coke Enterprises

Coke Enterprise: Where is the road? Editor: Chengmanlin choreographer: Coulie: Wang Yang (column) Moderator: Good evening, welcome to the economic half-hour. Today we focus on the coke industry. Coke is an important product of coal chemical industry, the main use is blast furnace ironmaking, is the iron and steel industry after iron ore is an important raw material. 2002, the world's demand for Coke surging, coupled with strong domestic steel demand, the coke industry has become one of the most lucrative industries, the size of Coke enterprises have earned a "bowl full." But in just two or three years, the coke industry's profits have started to slide, and now are on the verge of overall losses. What causes such a big industrial change?　　Our correspondent specializes in the investigation. Guo Kanghu came to the time of Aetna in Shanxi is 1997, when the village of Shanxi is the ignition smoke, crazy coking era. The enterprise, which relies on the coking of the earthen kiln, is now a large coking enterprise with an annual output of 2 million tons of coke, even with its own steel mills. Villagers in 11 villages are living by the company. Guo Kanghu also from an ordinary employee into the entire group of the Secretary.　　Soaked in the Coke ring for 14 years he felt the greatest pressure in a year or two, as the company's Coke business has been virtually unprofitable for more than a year, sometimes at a loss.　　Guo Kanghu Shan Xi ' an Thai group board Secretary Guo Kanghu: can barely baoping or meager profit, profitability is difficult to say, individual time, because the market as a whole is a constant fluctuation of the process, most of some will also occur losses. In fact, this situation is not only happening in the Aetna family.　　More than the national scale coking plant has 800, and all the coking factory together there are nearly thousands, in fact, most of the coking plant is in the margin of profit and loss or even the situation.　　Zhou Zu festival Anhui Lin Huan Coking Co., Ltd. General manager Zhou Zu section: This we see from the first quarter of this year, we are flat, should be said, as the price of the coal industry, they should be said in terms of pricing, it is still relatively strong, so in the first quarter, we are flat from the profit angle.　　Gold dry China Coking Industry Association President Huang Jingan: Last year nearly 40% of the enterprise is the loss of relatively good, can be normal operation of the One-third, accounting for all enterprises One-third, One-third more. has been considered to be profiteering of the coking industry why suddenly there will be losses? All the insiders point to their upstream, coking coal. 09 10 Two years, coking coal prices all the way up, especially at the end of 2010, accounting for 70% of the world's coking coal exports of the floods in Australia, but also the domestic coke prices from 1000 yuan suddenly pushed 1700 yuan high, the rise reached 70%. Often received coking coal enterprise price adjustment Notice, Coke enterprises are feeling helpless. In many industry, the current rise in the price of coking coal is of course related to the market situation, however, coal enterprises in recent years, the continued strong and monopolistic position of strengthening is further pushHigh coal prices, coke enterprises in the procurement of raw materials when the full disadvantage of the position.　　Feng Tianjia Shandong Province Coking Industry Association executive Vice President Feng Tianjia: Coal This son can control, you, for example, the market should not (too) beg, I can stop, do not produce, I only use one Class A day production, you need today 100 tons, I produce 80 tons, who take the money to who, the Price said on the up. Huang Jingan: Coking coal Resource This is, in itself, a high degree of concentration, because the small coal mine integration, the main remaining large coal mine, so it has increased the concentration of the industry, monopoly status, so it is more powerful, our domestic production and production scale so large, our Coke production, accounting for more than 60% of the world,　　Now can say is more than 65%, so big market, so our domestic coal prices are also up. Guo Kanghu to the reporter to calculate a sum. Refining a ton of grade two Coke requires 1.3 to 1.4 tons of clean coal. One of the main coking coal will be accounted for One-third. According to the current main coking coal price of 1700 yuan per ton, the main coking coal in the cost reached about 800 yuan. The other three points two of the coal will cost about 1000 yuan. Plus labor, depreciation and other fixed costs, a ton of coke cost reached 1900 yuan.　　And now their coke price is only 1900 yuan, there is no accounting, and some enterprises even the production of a ton will pay 100 yuan. Guo Kanghu Shan Xi Tai Group board Secretary Guo Kanghu: Now from the price situation, if you do not control the enterprise, comprehensive benefits play not come out, then you this deficit basically according to the current price look, must be a loss, the main coking coal 1700, plus other coal, but not a ton of clean coal, you can refine a ton of coke,　　It has a different amount. Moderator: The production of a ton will lose 100 yuan of money, this is so that the coke enterprises can not afford. In order to survive, Coke enterprises have to raise the price of products. Since 2010, Coke Enterprises in four provinces of Inner Mongolia, Shanxi, Hebei province, have tried to increase prices by restricting production. Yet this seemingly logical move is now difficult to achieve.　　Why does the Coke enterprise even raise price to say not to forget? Aetna No. 9th afternoon out of the first furnace Coke. The smelting of Coke in this furnace has undergone 40 hours, while the normal smelting of Coke takes only more than 20 hours.　　Guo Kanghu told reporters that at present their more than 200 coke oven all artificially to lengthen the coking time to 40 hours. Guo Kanghu: One times longer, it reduces the output by half, so the production capacity is only about 50%, the entire coking industry benefit is not only Aetna, starting from last April, such limited production in Shanxi, Shandong, Hebei, Inner Mongolia and Shanxi province, five provinces of hundreds of companies have been continuous or intermittent. And such a large scale of restriction is from last year's five provinces alliance. At the end of April last year, Shanxi Coking Enterprise Alliance convened the Coke Market Analysis symposium. Shanxi, Hebei, Shandong Province of the Coking Association and Shaanxi, Inner Mongolia and other provincesCoking enterprises attended the meeting. At the meeting, all the members were required to strictly implement the principle of Indina, five provinces linkage, the full implementation of limited, reduce coke inventory.　　Coking Enterprises in Shanxi Province in accordance with the range of 40%, Hebei, Shandong, Shaanxi, Inner Mongolia coking enterprises in the range of 30%. Feng Tianjia of Shandong Province Coking Industry Association executive Vice President Feng Tianjia: Maximum time limit to 40%, long time to a month or two, if you do not restrict, coke you sell, a large backlog, nothing but the price is lower you are also outside sales, anyway, Shandong now this market is not a closed market, is an open market,　　You shandong in this limit, Shanxi it not limited to, he does not limit, that most, you this, he put you this market occupation, we through the Association exchange some information, together make this market orderly competition, to analyze the market, put forward some guidance opinion. However, in the face of Coke's entire industry to increase prices, steel mills as the main consumer but does not pay. Taiyuan Iron and Steel group in Shanxi Province, responsible for the group's financial research Tao Jiajin told reporters that a ton of steel cost of coke accounted for about 15%~20%, if the price of coking coal per ton rose 150~200 yuan, will make the cost of crude iron up about 4%~5%. Since the economic crisis, the national steel market is also very weak, the entire industry is already on the verge of profit and loss.　　And in recent years iron ore price soaring has let the steel mill's profit drop a lot, if the coke in the price, the living environment of steel mills will be even worse.　　Tao Jiajin, researcher of Taiyuan Iron and Steel Finance Department Tao Jiajin: We now profit level is about 2% or 3%, before the financial crisis, good time to reach 5%, 6%, because our profit is too low, we have to give it a higher price, its profit is high, our profits will be lower. Moderator: China is the world's largest producer, consumer and exporter of Coke. 2010 National Coke 85%-90% was consumed by the steel metallurgy industry. In recent years, China's iron and steel production continues to climb, is currently in the peak of steel consumption, the coke industry should be the same as the sales of hot situation. In addition, we know that any industry is a chain of industrial components, the chain of any one ring is symbiotic development, why the coke industry will be because of the squeeze from top to bottom to survive difficulties?　　Reporters in the investigation found that the coke industry has come to this day, there are some unknown reasons. Upstream has the strength of coal enterprises and prices, downstream of the iron and steel enterprises themselves are at the edge of profit and loss. Squeeze under pressure, coke enterprises survive difficult.　　However, experts believe that the current situation of Coke enterprises is related to the market environment, but also more important is that the entire industry is currently overcapacity, the poor market environment also makes the coke enterprises inside each other, internal friction is serious. Huang Jingan, chairman of China Coking Industry Association, has been worried about the development of China's coke industry.　In his view, the current rising raw materials and demand is only the coke industry turmoil occurred in the fuse, and the real reason is that the entire industry has a serious overcapacity.　Huang Jingan: According to our say (capacity) 450 million to 500 million tons, last year we included exports, last year we produced 338 million tons of coke, only exported 3.35 million tons, we also imported about 100,000 tons, so basically say 300 million, we 98%99%　　These are in the domestic sales of actual demand and capacity of about 100 million tons. Huang Jingan told reporters the face of limited market, overcapacity problem is unlimited amplification, and the competition between enterprises also intensified. Four provinces of coking enterprises can be limited, but in addition to Tibet, Hainan Island, along with the mining of coal resources, all provinces in the construction of coking industry. There are also differences in production costs between different regions and between different enterprises.　　As long as the price of Coke in a business or an area is buoyant, other areas will soon occupy the market. Huang Jingan: So now we have coke prices, regional difference in four hundred or five hundred dollars, you like to Inner Mongolia, Ningxia, Lanzhou Yonder, more than 1400 dollars, you to East China, 1089, the difference of four hundred or five hundred dollars, the southwest also has three hundred or four hundred Yuan Gap, so this plus transport, so this price difference ah relatively large,　　You this place the price is a little higher, he has shipped over here, your side price is low, he this side again to Sinotrans, so compete with each other, more intense. Upstream coal enterprises strong, downstream of the iron and steel enterprises themselves in a weak state. Upstream prices, costs rise and can not be delivered downstream. The smaller the market, the greater the internal competition for overcapacity, and the rivalry between peers.　　Coke Enterprises in two aspects of the squeeze and peer competition has lost its independent status. Huang Jingan: The core of this business is, just said two, you overcapacity, the market exceeds demand, steel prices high, people downstream industry, steel a price, first pressure who ah, then press Coke, because the coke itself is a middle product, and overcapacity, pressure your price is no way,　　So the entire coke industry profit margin is not high, this by the upstream and downstream industry, upper reaches is strong, downstream it is also a overcapacity, product prices do not go, conduction obstruction, so the coking enterprise's profit space at both ends of the squeeze. Moderator: Reporter in the investigation found that the current situation of Coke enterprises is certainly related to the market environment, the more important reason is that the entire industry at present overcapacity, the poor market environment makes the coke enterprises inside each other, internal friction serious. The temptation of profiteering in the Coke enterprise crazy expansion, but also buried the curse.　　How does the coke industry in the margin of loss get out of trouble? Moderator: More and more loss of production has become a knot in many Coke enterprises. According to China's Coking industry Association released data, in recent years, Coke enterprises generally meager profit and even large losses, until 2010 the industry only slightly recovered. Under the extrusion of the upstream and downstream, where does the coke industry go? April 15, 2011, the world's first Coke futures in the Dalian Commodity Exchange officially listed transactions. This means that Coke companies will have the potential to use futures this goldFinancial means to help enterprises to lock profits and avoid risks. A year-long loss has been the pressure of Coke enterprises to breathe, and Coke Futures will be listed in the industry has arisen in a small wave.　　Companies are pinning their hopes on the financial markets of Coke futures, hoping to help companies lock in profits and avoid risks by using futures tools. Coke futures in Taiyuan One of the promotion, more than 150 participants let this venue a bit crowded, they are commonly known as the coal boss or coking enterprises in charge, behind the funds said there are tens of billions. Their faces were grim, but their eyes were full of curiosity.　　What can the Coke futures market bring to their enterprises?　　Zhou Zu section Lin Huan Coking Co., Ltd. General manager Zhou Zu section: I hope that the effectiveness of my situation, there should be a relatively wise judgment, you even next month, you are not judge of the time, you want this enterprise, how do you manage, how to operate Guo Kanghu Shan Xi ' an Thai group board secretary　　Guo Kanghu: Through the futures market contract, I can go to combine my own changes in the form of the industry, combined with my own production arrangements, to do a part of Coke futures, by doing this hedging, at least for the enterprise it added a can lock the current profit. In fact, as early as in 2004, there were calls for Coke futures listed, but at that time Chenge is not Coke enterprises but steel enterprises. 2004 Rebar futures listed, many iron and steel enterprises have found the futures tool to bring them a new business ideas. and rebar futures just help them lock the profits, if the upstream Coke futures listed, they can lock costs, so that their operations to avoid a considerable risk.　　However, with the difficult situation of Coke enterprises, more and more enterprises have to pay attention to the futures market, the original not very active coal bosses are now everywhere to participate in training seminars promotion. Yongjiang Futures analyst Yongjiang: 2010 we began to contact the Coke enterprise that time, may ask is what futures are, now the customer is more concerned about is your cover plan, is what kind of, raised the problem more and more professional coking enterprises are concerned about how to lock the profits through Futures, Avoid the risks posed by price fluctuations. However, the so-called hedging most companies do not really understand.　　How can a financial product help companies avoid the risk of price fluctuations? Zhangxiaohe Everbright Futures Dalian Sales department general manager Zhangxiaohe: Then in July, you can sell 10,000 tons, because Coke futures this contract is 100 tons, then the equivalent of 10,000 tons of 100 hand coke contract, then the price is 3000 yuan, when August, and then the spot market Coke price fell to 2850,　　Futures market prices fell to 2820, then this time, you in August to hedge your 10,000 tons of the contract, so that in the futures market to achieve a profit, but also a ton of 180 yuan, 10,000 tons of words is 1.8 million, the successful make up for your spot market because the price drop brought losses. Reporter: AlsoIn other words, my last 10,000 tons of Coke were sold at a price of 3030 yuan.　　Zhangxiaohe: Yes, Reporter: If the price of Coke is rising, I predict the price will rise.　　Zhangxiaohe: If you anticipate the price rise, if you are very sure, you can not do hedging and selling hedging, if you are not very sure, you can do a little bit of hedging, to reduce this amount. Enterprises are concerned about the use of Coke futures hedging, locking profits, to avoid risk. While standing in the whole industry, experts consider more is the role of Coke futures in the industrial integration. Huang Jingan told us to change the current industrial mess must be to achieve industrial integration, reduce production capacity control output, and the current industrial integration depends mainly on the administrative force. To control the enterprise's admittance and operation by the high level of coke oven or environmental protection standard. In his view, however, the sophistication of the enterprise is not only the level of equipment but also the level of management.　　Hedging function can use good enterprises can often lock good profits and release production, and do not use futures, or bad futures companies may be in the market fluctuations in the gradual loss, with the passage of time, two of enterprises operating conditions to pull off the level of natural enterprises to promote the fittest. Huang Jingan: We want futures listing, our goal is to promote the healthy development of the industry, to promote the industry structure adjustment, speed up the pace, I think can also be able to quickly obsolete, this backwardness may not only the stove small, small size behind, but your management technology can not keep up,　　Technological innovation technical renovation can't keep up or your business philosophy has problems with the concept of management, it is possible to be eliminated. Huang Jingan told reporters, such as coal resources products, with the future of less reserves, price increases have become inevitable. And the current overcapacity of the coking industry is difficult to carry the price, as a business to survive can not only rely on Coke to make money.　　To achieve profitability and maintain survival, coking enterprises can only extend the industrial chain, from coal chemical products to obtain profits. Huang Jingan: As a coking industry, itself it this product is relatively single, especially Coke, but its follow-up products should be said that by-products of chemical products or a lot of, for example, coke oven gas can be extracted from the coking coal tar and benzene, and then the coke oven gas, coal tar and benzene, it can further processing, Dozens of products, and then one is coke oven gas, in the past, it has long been burned as a fuel, cylinder body heating or electricity fired boilers in these areas, but if you do a good job, the back of the gas can be recycled to the maximum, it produced high value-added, High-tech products, can create better economic benefits,　　You are a competitive enterprise. Huang Jingan that with the development of China's economy to a certain extent, steel demand will gradually reduce, so the demand for Coke will gradually reduce.　　At present, the coke industry has a serious capacity to want healthy development, can only continue to eliminate backward, continuous integration. Huang Jingan: Backward in the future, I thinkis a long-term task, this backwardness is dynamic, is also relative, you in this present, because you have such a large demand, then you this coke oven can also produce a market, environmental protection to make a good point can exist, but there is always a day until the steel market to a certain extent, you can not use so much coke,　　The chain of the industry behind you is not good, then you may have to be eliminated first, this structural adjustment until China's industrialization, urbanization reached a certain level, this structural adjustment, substantial structural adjustment is inevitable. Moderator: Enterprises and the industry to the Coke futures market to give a high expectation, it is also expected that Coke futures can bring new opportunities for business and even industrial development, however, the industry believes that the future Coke enterprises want to continue to survive, not only to use good futures, but also the extension of the industrial chain, and for the entire industry, The industry wants a healthy presence and constant integration is inevitable. Coke Enterprises must be aware that although China is the world's largest producer and exporter of Coke, its production has reached 62% of the world's output, but because of the industry has dispersed capacity, access threshold is too low and so on a series of ills, so that their long-term in the international market and "quantity" of the right to speak and pricing rights. This is the coke industry has long been the root cause of profit space squeeze. We hope that the Coke enterprises continue to cultivate the internal strength, improve the technical content, integration of industry resources in order to improve their competitiveness and improve the bargaining power in the upstream and downstream. Only in this way can the industry develop healthily. Today's program is here to thank you for watching.