How will the spot market of power coal change in the post epidemic period?

On April 17, the online free live broadcast activity of "post campaign era, power coal market outlook and enterprise risk management" jointly held by China coal resources network and Everbright futures was successfully concluded. The online live broadcast attracted nearly 1500 people to watch, and the users who participated in it spoke highly of the live broadcast activity, and hoped that more such activities could be held in the future. In this online live broadcast, Chen Tianyu, senior analyst of China coal resources network, combined with the price trend of power coal in the first quarter, elaborated the impact of the epidemic on coal and downstream industries from different perspectives, and predicted and analyzed the trend of power coal market in the later period. Chen Tianyu pointed out that in the Spring Festival holiday in January, the upstream coal mines shut down for holidays, the supply contracted, and the coal price maintained a stable and medium-sized rise trend under the support of winter heating demand; in February, when the new crown epidemic was high in China, the upstream and downstream resumption of work were delayed, the overall inventory after the festival was digested to a low level, and the downstream centralized procurement raised inventory, short-term supply exceeded demand, and the price rose rapidly.

"In March, the upstream coal mines returned to work faster than the downstream industrial enterprises, the supply and demand situation changed rapidly, the overall inventory was high, the price fell rapidly, and the coal prices in many places successively fell below the low point of nearly three years." Chen said. Affected by the fall in coal prices, the average profit of coal mines in the "three West" region fell in the first quarter. Chen Tianyu said that in 2019, the average profit of high-quality coal mines in the "three West" region exceeded 200 CNY/ton, and the average profit of the whole coal mine was about 154 yuan, which was in a high profit operation with high production enthusiasm, while the average profit in the first quarter of 2020 was about 137 yuan. In terms of imported coal, the import quota was exhausted at the end of last year, and the restrictions on imported coal were tightened. Some customs suspended the berthing and customs clearance of imported coal. "This year, the implementation of coal import policy has greatly increased, which is extremely strict compared with the previous one. In January and February, under the expectation of further tightening of import policy, the terminal purchased ahead of time, adding up the domestic rising market, and a wave of small increase in imported coal appeared." He said. "Since late February, the coastal market has been weak, and the downstream continues to depress the purchase price, with the superimposed freight rate falling, and the import coal price rapidly falling." In view of the trend of coal price in the later period, both positive and negative factors coexist.

Among them, the favorable factors are mainly reflected in: 1) the high concentration of resources in the main production area. When the coal price continues to fall and the coal mine suffers losses, the private mines will appropriately choose to reduce production and protect the price; 2) it is reported that the overhaul of Daqin will be postponed to may, when part of the supply will be reduced to curb the surplus situation; 3) the highway will resume charging and the advantage of coal transportation will be reduced; 4) the peak time of summer There may be purchase and replenishment ahead of time. In terms of negative factors, 1) large state-owned mines and state-owned enterprises have annual production and shipment task assessment, and without policy intervention, the output is difficult; 2) port inventory is high, and some supply enterprises with high inventory pressure will continue to reduce prices and promote sales; 3) April June is the traditional off-season, so the demand for coal consumption is difficult to increase; 4) the epidemic affects the production reduction or shutdown of some downstream factories It is difficult to boost the demand for industrial coal and electricity. In general, Chen Tianyu believes that the market has been changing around the epidemic since the beginning of the year. Although the epidemic is a double-edged sword, which has an impact on supply and demand, in the first quarter, the recovery of power coal supply is faster than the recovery of demand, with positive supply growth and negative demand growth. The overall supply and demand are seriously unbalanced. In addition, with high inventory, the coal price has no obvious positive support. "Most market participants said that based on the current market supply and demand situation and the consideration of seasonal factors in the second quarter, they believed that the coal price in the first half of the year would be kept at a low level, and the later trend should also pay attention to the development of the epidemic situation and the change of market supply and demand." Chen said.