Exploring the Logic Behind the Rise and Fall of Coal Price in Origin and Port

Since this week, the main producing areas of power coal and coal prices in northern ports have begun to show a trend of differentiation. Coal prices in Shaanxi and Inner Mongolia have been rising steadily, while coal prices in ports have remained cold and falling. This situation completely reversed last week's "weak origin, hot port" situation! So why has this happened in recent changes in coal prices? What kind of logic lies behind the "alternation of heat and cold" situation of coal prices in the producing areas and ports? Today's think tank believes that it is necessary to correctly straighten out the potential logic and operating mechanism of the current coal price changes in origin and ports, because it is essential for us to scientifically predict the next stage of market changes and fully grasp the trend of coal prices.

Next, we will make a brief analysis of the recent situation of "hot origin, cold port". On the production area, think tanks today are concerned that in recent days, more than 10 mines in Yulin and Shenmu areas in Shaanxi Province have increased coal prices by 20-60 CNY/ton, and the congestion of coal pullers is still very serious. At the same time, some coal prices in the adjacent Ordos region have also increased by 5-10 CNY/ton. Today's think tank believes that there are two main reasons for this week's centralized "explosive" rise in coal prices: first, coal production in Shaanxi is limited, and production shrinks significantly. At present, the resumption of coal production in Shaanxi is still relatively difficult. This week, the control of coal pipe tickets in Yulin and Shenmu coal mines has become stricter. In addition, most private mines in Shenmu have basically stopped production at night. The coal supply has declined dramatically, and the recovery of production capacity has fallen far short of expectations. Secondly, some inland power plants have begun to replenish their stores in advance. In addition, the demand of cement and chemical industry downstream is in peak season. The existence of a large number of superimposed vehicles purchased by market end-users for high-calorie and low-sulfur coal resources in Yulin promotes the continuous rise of coal prices in Yulin area. On the northern port side, the port market tends to be cold this week. On the one hand, some coastal power plants in the South benefit from the continuous supplement of imported coal, which weakens the demand for Northern ports. On the other hand, under the situation of "port heat", the "wave-like" purchasing market of cement and chemical industry is now pouring into the pithead market in the form of "big wave without wave". Undoubtedly, the transfer of downstream cement and chemical industry demand will inevitably lead to a "stagnant pool" of port market.

Through the above analysis, it is not difficult to find that in recent years, the situation of "alternation of heat and cold" in coal prices of origin and port is fundamentally caused by the structural differences of downstream terminal demand. Further, the southern power plant imports coal in the replenishment depot, while the cement chemical industry in the replenishment pithead coal!

However, some people are asking why this difference is caused. Why does the cement chemical industry not go to northern ports to purchase? Because the high-carb and low-sulfur coal resources in northern ports are still on the low side and the quotation is higher, this is one of them, and the other is that the procurement cost of pithead market is more economical than that of port market.

Then how to deduce the coal price at the place of origin and pithead in the next stage? Predict the details, we will analyze the next issue of the article again!