The price of coal in China has fallen below the 500 yuan mark

In the short term, coal prices will continue to fall. The domestic coal price has fallen below the 500 CNY/ton mark. On April 15, cctd Bohai power coal q5500k spot reference price was 498 CNY/ton, down about 11% from 559 CNY/ton at the beginning of the year. Q5500k refers to the power coal with a heating capacity of 5500 kcal. So far, the domestic coal price has officially dropped from the lowest level of "green range", which is the first time in nearly four years that it is lower than 500 CNY/ton. At the end of 2016, the memorandum on curbing abnormal price fluctuations in the coal market jointly signed by the national development and Reform Commission, China Coal Industry Association, China Electricity Enterprise Federation and China Iron and Steel Industry Association made it clear that an early warning mechanism for abnormal price fluctuations should be established between 2016 and 2020.

In this mechanism, the price of power coal is divided into three situations: the green range is normal, and the coal price is between 500 yuan and 570 CNY/ton; the blue range is slightly up or down, and the coal price is between 570 yuan and 600 CNY/ton or between 470 yuan and 500 CNY/ton; the red range is abnormal up or down, and the coal price is above 600 CNY/ton or below 470 CNY/ton. According to the above memorandum, no control measures shall be taken in the green range, necessary guidance measures shall be taken in the blue range, and the response mechanism of stabilizing the abnormal fluctuation of coal price shall be initiated in the red range. The last period when the domestic coal price was lower than 500 CNY/ton was from 2015 to September 2016. Photo source: in 2015, after the development of "golden decade" in 2002-2012, the coal industry's output surged from 1.55 billion tons to 3.95 billion tons, with an average annual growth rate of 10%. The industry finally fell into serious overcapacity, the market began to collapse, and the coal price entered the decline channel.

At the end of 2015, the closing price of 5500 kcal power coal in Qinhuangdao fell to about 370 CNY/ton, down 29.5% from 525 CNY/ton at the beginning of the year, reaching the level of coal price in 2004. Later, with the promotion of coal supply side reform, coal prices began to pick up in the second half of 2016. On April 14 this year, the National Bureau of Statistics said that in the first ten days of April, coal prices across the country as a whole fell sharply. Among them, the decline of coking coal price has been narrowed, and the decline of power coal price has expanded. A number of coal industry analysts told the interface news that at this time, the traditional demand is off-season. In the short term, coal prices will continue to fall. Due to the impact of coal off-season superimposed epidemic situation, the demand for electricity and coal in the downstream has not been significantly improved, and the power plant inventory is still high. On April 16, the total inventory of six coastal power plants was 16232000 tons, 18800 tons higher than the previous day; the daily coal consumption was 578800 tons, 30600 tons higher than the previous day; the available days were 28.04 days, 1.2 days lower than the previous day. The overall sales situation of coal mines also remained weak.

According to China's Taiyuan coal trading center, the price of coal in Yulin area is reduced by 5-45 CNY/ton for different mines and 5-20 CNY/ton for some large mines in Ordos area. Jiao Jingping, technical director of Beijing Energy Research Management Consulting Co., Ltd., told interface news that with the supply side capacity tightening and the gradual tightening of import policies, coal prices are expected to stabilize. The Safety Committee Office of the State Council previously issued a notice that, from April to July, it required the provincial safety committees to take the lead to re determine the production capacity of the "two types" coal mines (rockburst mines, coal and gas outburst mines) in normal production, and to clean up the illegal nuclear production projects. This wave of coal prices fell, but also by the impact of imported coal. From January to March this year, China imported 95.778 million tons of coal, an increase of 28.4% year on year, according to data released by the General Administration of Customs on April 14. On April 15, interface news participated in the online meeting of "international power coal Q2 market outlook and OTC derivatives application" hosted by e-coal. At the meeting, Zhang Mohan, a senior researcher of power coal in Yimei grid, said that there were three main reasons for the large increase of imported coal volume in the first quarter, namely, centralized Customs clearance at the beginning of the year, tight domestic supply after the festival and preemptive quota of terminal procurement in advance.