Coal prices are expected to stop falling and stabilize over the weekend

After Labor Day, production across the country has gradually returned to normal, and power plant power generation and heating capacity have rebounded, but power plant inventory has continued to maintain a high level.coalThe market is showing a "three highs and three lows" trend, namely high output, high import volume, high inventory, as well as low demand, low procurement, and low return.Coal MarketThe weakness was fully exposed. This week, affected by the large number of imported coal landings, domestic traders sold goods at low prices, promptingCoal priceA devastating decline.

First, the economic recovery is relatively weak. The manufacturing PMI index in April fell sharply by 2.8 percentage points compared with March. The economic operation is still under pressure, the market performance is lower than expected, and the economy is basically limited in terms of support for the current coal market. Secondly, there is too much coal imported and the inventory is obviously high. This year, there are more coal production, more imports, and more storage, including the upstream production areas, the ports in the middle, the second ports, and the downstream power plants. The coal stored in each link is full of upstream. Up to now, 31.15 million tons of coal stocks in major ports in the Bohai Rim Sea are at a high level, an increase of 38% year-on-year. Among them, after the Daqin Line returned to normal, the coal reserves in Qingang increased rapidly, and now it has reached 6.26 million tons. Downstream, the national key power plants have 108 million tons of coal, 21 million tons higher than the same period last year. Again, Shenhua has difficulty in purchasing and loading vehicles, and the market in the production area is even more exhausted, and it has begun to reduce prices and promote sales. This week, the price reduction coal mines increased significantly, and the decline increased, and the price reduction coal types also increased accordingly.

Although economic recovery, peak summer and possible high temperature and drought weather will drive the daily consumption of power plants to rebound; if too much coal is imported, and the timely supply of long-term supply will accelerate the bottoming out. The market in early summer is not optimistic, the supply and demand side of the coal market is still loose, and price operations will continue to be under pressure. First of all, due to factors such as the suspension of production of some open-pit coal mines in Inner Mongolia and the stricter security inspection situation in the main production areas, supply has tightened; however, in the case of sluggish demand and the surge in imported coal, the market is not tight, and it is difficult to support coal prices. Secondly, under the long-term cooperation and imported coal supplement, power plant inventory continued to maintain a high level, and the demand increase was significantly lower than the supply increase; and various parts of the south gradually entered the flood season, hydropower gradually improved, and short-term terminal demand remained weak. Again, although the thermal power load has increased significantly, the market supply has increased a lot and social inventory is relatively high, which is enough for thermal power plants to consume for a period of time, suppressing the rise in coal prices. However, the market will still have certain support next week, and coal prices are expected to stop falling next weekend for the following reasons:

1. With the efforts of macro policies and the recovery of business operations, the power demand for the primary, secondary and tertiary industries will increase significantly compared with last year. During the high temperature and high humidity period in summer, the air conditioning load will be raised, driving the daily consumption of power plants to rebound.

2. After the domestic coal price falls to 800-820 yuan/ton, it is cheaper than imported coal, and its competitive advantages begin to emerge, and the inquiry and procurement will increase, prompting the domestic coal price to stop falling and stabilize.

3. The resources in the main production areas not only flow to the Bohai Rim port, but also face the procurement of a large number of inland provinces and cities. Therefore, the peak of coal use in summer is not pessimistic. Since the production market is less affected by imported coal and the shipment to the port is seriously inverted, it will largely support the port coal price not to fall deeply.