Before the holiday, coal prices enter a stage of consolidation and stability

This week, the weather in the south turned colder, and the cooling load of residents fell, but the non-electricity industry had plans to resume production, and industrial electricity consumption was slowly rising; at this time, the water and electricity transmission capacity of the major hydropower provinces in southwest weakened due to meteorological drought, and some power plants still had plans to replenish warehouses between the National Day, which in turn promoted the decline in terminal coal consumption. In terms of inventory, the daily consumption of downstream power plants has slowly declined, the main power plants have accelerated the pace of restocking, and the inventory of terminal power plants has increased slightly. Before the holiday, there are five or six working days left, and it is expected that the port coal prices will enter a stalemate and stable stage.

(Source: Ordos Coal Network Author: Wu Jinglin)

The scorching heat in the southern region is getting farther and autumn has begun. The temperature in East and South China has dropped below 30 degrees Celsius. As winter approaches, it is a good time for power plants to replenish warehouses, and small and medium-sized power plants still have to replenish warehouses. At the same time, inventory in the Northeast is relatively low, and winter storage procurement is also steadily proceeding. In addition, although the market has low expectations for non-electricity demand year-on-year performance due to weak macroeconomics, it is the traditional peak production season, and its month-on-month procurement efforts have increased, which has boosted traders' expectations for improved demand; in addition, the Bohai Rim port is still in short supply, and traders' willingness to support prices may still be relatively strong.

The load of terminal power plants has fallen to 70%-80%, and some power plants have begun to arrange power plant units for maintenance, and the existing inventory is enough to support power generation consumption; due to the significant increase in market coal prices, the downstream is currently on the wait-and-see. This week, downstream users' purchasing enthusiasm is average, mostly waiting and watching, the port has limited suitable supply, traders' quotations are also maintaining strong, and buyers and sellers have not made many transactions. Regarding future market expectations, downstream inventory is slowly rising, and entering the off-season, power plants demand is average, and the support for the continued rise in coal prices is insufficient, so coal prices maintain stable operation before the holiday.

In terms of origin, the purchase price of large groups' production sites rose slightly, which boosted the market sentiment in the main coal production areas. Some coal mines continued to raise prices slightly, and the transaction prices of some large mines auctioned also rose slightly compared with the previous period. However, downstream users still mainly transport the transportation of the long-term contract and the urgent needs. Most traders remain cautious and wait and see, and dare not stock up on coal easily, and seize the time to ship. For this round of increase in coal prices at pits, the main reason is the release of demand for restocking before the National Day, coupled with the combined effect of multiple factors such as reduction in production and rainfall. Judging from the sales, inventory changes in various mines in the production area and the queue of trucks, there is no condition for a sharp rise. It is expected that the rise in the production area will continue until this week, with limited growth.

This week, the coal market's rise slowed down and coal prices entered a high-level consolidation stage. Although the high temperature in the south has decreased, the rigid demand for replenishment of stocks in the downstream industries is still there. In addition, the operating rate of the non-electric industry has increased seasonally, making sellers optimistic about market demand. The coal stocks in domestic coastal power plants are relatively low year-on-year compared with last year. In addition, the National Day is approaching, the seller continues to be optimistic about the pre-holiday market. Even if the coal price does not rise, it will not fall sharply for the time being.