Coal price ushers in the final "crazy"

In the middle of this month, the hot weather in the south kept electricity consumption at a high level. In addition, the water and electricity output in the southwest region was insufficient, and the thermal power peak was at the bottom, and the coal has not yet fallen significantly. The procurement of material reserves in some non-electric industries has prompted the short-term release of demand, which has support for coal prices. Therefore, coal prices have performed firmly and continued to rise slightly. After the Mid-Autumn Festival, although the high temperatures in Jiangsu, Zhejiang, Shanghai and other places have decreased, the high temperatures in South China and Fujian have not yet subsided. Coal prices are still supported by power plants replenishing warehouses.

(Source: Ordos Coal Network Author: Gong Hailing)

In early and mid-September, the domestic "Autumn Tiger" performance far exceeded expectations. In addition, the accelerated weakening of hydropower caused by "south rain and northward migration", the daily consumption of key power plants in the country increased instead of decreasing, and the daily consumption of coastal power plants even increased by more than 15% year-on-year. It also promoted the increase in the purchase of long-term transportation and urgent demand by downstream terminals in the first and mid-September, but as the overall inventory level remains median high and the destocking speed is slow, the procurement strategy is still mainly to lower prices and inquire for small amounts. Therefore, in early and mid-September, the price of coal in ports did not increase much, and the room for growth was limited. The price of coal rose from 843 yuan/ton at the beginning of the month to 868 yuan/ton yesterday, up 25 yuan/ton.

During this period, the domestic coal market has performed relatively strongly, with four main factors. First, during the two festivals, the centralized release of terminal demand has brought a significant boost to the market, and the number of anchor ships at the Bohai Rim port increased. Secondly, the abnormal climate has set aside the short-term coal supply and demand situation and the procurement and sales atmosphere, prompting an increase in inquiries. Again, the Northeast region has launched winter storage and replenishment, and traders from the origin store in advance, power plants prepare coal, and the cost-bearing price. Fourth, the mood has been weak for a long time, and coal prices are basically at a stop-and-down trend from late May to late August. After the inventory pressure at the Bohai Rim port fell, there was a structural shortage of stock, which prompted sellers to increase their voice in pricing.

Since the beginning of this year, the supply of the coal market has generally declined steadily, but the supplementary and substitution effect of a large amount of imported coal has been obvious, effectively alleviating supply pressure and causing port coal prices to rise less and fall more this year, and the center of gravity has continued to move downward. Entering September, although downstream demand has entered a seasonal decline, power plants have also begun to replenish warehouses. Coupling in the non-electric industry has provided certain support for the rise in coal prices.

At present, the market is at the end of the peak season for power coal consumption and the non-electric terminal consumption stage, and the main driving factors of thermal coal market demand are facing switching. Starting last weekend, the daily consumption of power plants showed a decline, and power plants began to enter the warehouse mode; in terms of non-electricity, except for the outstanding performance of the chemical industry, the demand for the other cement and steel industries is poor. Recently, the traffic volume of the Daqin Line has accelerated its recovery, and the Bohai Rim Port has entered the warehouse building mode; the superimposed power plant replenishment is approaching its end, and demand may gradually fade. This week, the increase in port coal prices is expected to narrow and stabilize before the end of the month.