A Summary of Current Coal Economic Situation

Since this year, the coal economy has been running smoothly on the whole, but there have also been some new situations. The output of some coal-producing provinces has declined, and the short-term supply of some areas is tight. Influenced by multiple factors, there are still unstable factors in the market and insufficient unbalanced development of the industry is still prominent. 

Data from the National Bureau of Statistics and the General Administration of Customs show that in the first quarter of this year, China's crude coal output reached 810 million tons, an increase of 0.4% over the same period of last year; in the first four months, China's imported coal reached 99.926 million tons, an increase of 1.7% over the same period of last year.

According to the preliminary estimate of China Coal Industry Association, China's coal consumption in the first four months was about 1.25 billion tons, a slight increase over the same period last year. At the end of April, the inventory of key coal enterprises decreased by 15.5% compared with the same period last year. Coal storage in power plants under national unified regulation can last for 25 days and is still at a high level.

"The main factors affecting market changes are as follows: first, the growth rate of coal consumption has slowed down, especially the consumption of electric coal has slowed down significantly; second, the production of coal in some provinces of Shaanxi, Shandong, Hebei and Anhui has declined, affecting the local coal supply in a short time; third, the continuous advancement of coal transportation mode `public transit railway', the improvement of transportation capacity of Daqin Line, Shuohuang Line and other lines, and transportation capacity. The bottleneck is gradually being broken. China Coal Industry Association, said the relevant person in charge.

According to the analysis, in the first four months of this year, with the slowdown of the whole society's electricity consumption and the increase of hydropower generation, the consumption of electricity and coal slowed down obviously, and the increase of coal consumption mainly comes from the demand of steel and cement industries. The output of Shaanxi, Shandong, Hebei and Anhui decreased by 14.1%, 7.8%, 6.7% and 4.3% respectively in the first quarter of the year. Affected by rock burst accident in Shandong Province, the approved production capacity of rock burst mines with mining depth exceeding 1000 meters is reduced by 20.14%. Affected by Shenmu Coal Mine Accident, the coal output in Shaanxi Province has dropped dramatically.

"The above situation has little effect on coal price." From January to May, the average price of medium and long-term contracts for power coal was 556 yuan per ton, down 7 yuan from the same period last year, the person in charge said. In the first four months, the market price of 5500 kcal coal-fired water was 611 yuan per ton on average, down 64 yuan from the same period last year.

Coal prices are supported, and the operation of coal enterprises is stable. According to the statistics of China Coal Industry Association, in the first quarter, the ratio of assets and liabilities of large-scale coal enterprises was 65.4% (the ratio of assets and liabilities of large-scale coal enterprises was 71.2%), which was 1.7 percentage points lower than that of the previous year, but the total profit was 18% lower than that of the previous year, which was 14.7 percentage points higher than that of Enterprises above the national scale. At the second meeting of the Fifth Council of the China Coal Industry Association held recently, several insiders said that the complexity of the economic field was increasing, the weather and hydropower output were uncertain. Coal enterprises should maintain their strength, continue to eliminate backward production capacity, develop advanced productivity and deepen supply. At the same time, we should deal with historical debts and legacy problems.

According to the data of the National Bureau of Statistics, in the first quarter of this year, with the advancement of capacity removal, the focus of coal production accelerated to concentrate in Shanxi, Shaanxi and Inner Mongolia, and coal production became more concentrated. The coal output of the top 10 provinces accounted for 92% of the whole country, while that of Shanxi, Shaanxi and Inner Mongolia accounted for 68.9% and that of the top 10 large enterprises accounted for 74.3%.

Nevertheless, China's total coal production capacity is still large, and with the release of new capacity, the amount of coal resources will further increase. At the same time, the production of coal mines with incomplete formalities and high safety risks will be restricted. The problem of insufficient unbalanced development of the industry is still prominent. Some enterprises have large scale of non-coal industry but poor efficiency, and some enterprises have not recovered from their deficits. In the first quarter, the losses of Coal Enterprises above the scale reached 34%, up 3.7 percentage points from the same period last year.

Most of the workers who shut down the coal mines in the first two years digest in the enterprise, and it will be more and more difficult to place them in the future. The disposal of assets and debts from coal mines is still slow. The difficulty of capacity removal is the diversification of equity and the complexity of debt composition.

China Coal Industry Association suggests that, while deepening the structural reform of coal supply side, we should start the "Fourteenth Five-Year Plan" study to build a number of large-scale modern coal mines in areas with good resources and transportation conditions, in accordance with the idea of integration of coal, electricity and heating, and seize the opportunity of adjustment of transport structure, and actively participate in the construction of coal transport corridors, collection and distribution systems and storage and distribution bases. Establish and develop modern coal logistics industry.