Why did coal prices continue to decline in April?

The upstream coal supply is abundant. According to the latest data from the National Bureau of statistics, in March, the domestic raw coal production increased from a decline. In March, the production of raw coal reached 340 million tons, a year-on-year increase of 9.6%. The growth rate changed from negative to positive, down 6.3% from January to February. The average daily output was 10.88 million tons, an increase of 2.73 million tons from January to February. Since April, the operating rate of coal mines in the main producing area has remained at a high level. Only a few mines have been shut down or reduced production due to high sales pressure in the near future, but there is no significant impact on domestic supply. In the case of high inventory of downstream users, the coal price below the main production area is the main factor. Take Datong as an example, as of April 16, the price of 5500 kcal power coal mainstream car board in the southern suburb of Datong was 370 CNY/ton, and the weekly environment ratio dropped 15 CNY/ton.

Although under the influence of international public health events, the international coal market has been impacted to some extent; at the same time, the domestic import customs clearance policy has been tightened, the advantage of import coal price gap has been weakened, and the role of domestic trade coal substitution has been weakened, but the coal import volume in March is still growing. According to the latest data of the General Administration of customs, in March, 27.83 million tons of coal were imported, an increase of 18.5% year on year; in the first quarter, 95.78 million tons of coal were imported, an increase of 28.4% year on year. The contradiction between supply and demand of transit port is prominent because it is in the off-season of consumption, the atmosphere of Port Trading and investment is cold, and the main port coal inventory in the north is accumulating continuously. Take Qinhuangdao port as an example. As of April 17, the coal inventory of Qinhuangdao port was 6.885 million tons, an increase of 885000 tons or 14.75% compared with the same period last month. The port inventory keeps rising, but the downstream terminal is mainly de stocking, the space for improving the actual demand is limited, the shipping pressure of traders is increased, and the quotation mostly varies from 8-15 CNY/ton according to the average weekly index of berthing day. As of April 16, the main closing price of 5500 kcal power coal in QinGang is 490 CNY/ton, and the main closing price of 5000 kcal power coal is 420 CNY/ton.

After the downstream power plants actively destocked and passively purchased in April, with the gradual warming of the weather, the residential power consumption fell, and the off-season effect of coal demand gradually became prominent. Under the influence of international public health events, some small and medium-sized manufacturing industries in the South have been impacted obviously, with fewer orders and lower operating rate, limited space for industrial and tertiary industry power consumption to recover, and further weak demand for electricity and coal. On the other hand, clean energy power generation, such as hydropower, has gradually recovered, further squeezing the market share of thermal power. Under the influence of multiple factors, the daily consumption of coastal power plants is still difficult to recover to the same period of previous years, and the strategy of actively destocking and passively purchasing is often adopted, while the purchasing activity in the north is not high; in addition, the delivery date of some power plants is delayed, and the downstream demand is weak. As of April 17, the inventory of six coastal power plants was 16.3014 million tons, a year-on-year increase of 1.2955 million tons, or 8.63%; the daily consumption was 564100 tons, a year-on-year increase of 26100 tons. In the later stage, the domestic coal production is normal at present. In the absence of other emergencies, the domestic coal supply will continue to maintain a loose running trend in the later stage; in terms of imported coal, after the import policy is tightened, the substitution effect for domestic trade coal will be weakened, but it still has a certain supplement effect on the market. In terms of downstream demand, April and may are the traditional demand off-season, while this year's off-season effect is particularly obvious, with continuous weak demand. The supply and demand pattern of domestic power coal continues to be loose, and it is expected that there will still be downward pressure on coal price in the later stage.