Analysis on the Trend of Coal Market

As a basic energy industry, the change of macroeconomic situation will affect the trend of the whole coal market. With technological progress, industrial transformation and optimization of energy consumption structure, the coal market will change accordingly. We should rationally analyze the trend of the coal market, prepare in advance and take the initiative to deal with it. 

1. Coal production and marketing showed a steady and slightly decreasing trend year by year. Coal production reached 3.974 billion tons in 2013. At that time, some experts and scholars in the industry had predicted that the total coal production would probably exceed 4 billion tons, but in fact it reached a historical peak in 2013. After that, the total coal production began to decline, and by 2018 the actual national output was 3.68 billion tons. In the past five years, it has dropped 300 million tons, showing a steady downward trend year by year. With the adjustment of economic structure and the progress of energy consumption structure, it is an inevitable trend for new energy to replace coal. In terms of consumption structure and the development of economic transformation, it is an inevitable trend for coal production and consumption to "double decline". Specifically to Jincheng, the same is true. In 2013, the city's coal production exceeded 100 million tons, and maintained at 88 million tons in 2018, which is also declining year by year. Now Jincheng's coal production capacity is 150 million tons, but the actual output is far below the production capacity, and has been controlled between 80-90 million tons. Therefore, the decisive factor of output is not capacity, but market. Demand is the main factor affecting the contradiction between supply and demand of coal.

2. Coal's dominant position in national energy consumption will not change for a long time

China is a country with "rich coal, less oil and gas", and its resource endowment determines that the dominant position of coal in the energy consumption structure can not be changed for a long time. In 2018, China's total coal consumption is about 3.6 billion tons, of which 2.1 billion tons (58%) are consumed by electricity, 620 million tons are consumed by iron and steel metallurgy, 500 million tons are consumed by building materials, 280 million tons are consumed by chemical industry and 0.6 billion tons are consumed by other coal. It can be concluded that electricity coal is the dominant factor determining the fatigue and prosperity of the coal market, strength and weakness. According to the comprehensive analysis of three sets of data of the power generation industry in 2018, the total installed capacity of the country is 1.94 billion kilowatts, an increase of 3% over the previous year; the total installed capacity of thermal power is 7 trillion degrees, with thermal power accounting for 5 trillion degrees, an increase of 7.3%; and the start-up time of thermal power is 4361 hours, an increase of 143 hours over the previous year. From this, we can see that the power installed, power generation, utilization hours are increasing, and the coal-fired volume is bound to increase accordingly. Therefore, the coal market is relatively stable.

3. Coal production capacity is far greater than market demand. The market has changed from basic balance of supply and demand to relaxed supply and demand. The coal market has changed from basic balance of supply and demand to relaxed supply and demand. Since the third quarter of last year, coal prices have shown a trend of continuous recovery. For example, in the fourth quarter of last year, the washing block was reduced by 80 yuan per ton. From the end of last year to the present, it has been reduced by 170 CNY/ton, and up to now, it has been reduced by 250 CNY/ton. In addition, small granular coal and foam coal have been reduced by a considerable margin. Ordinary foam coal has been reduced by 40 CNY/ton and washed coal by 80 CNY/ton.

In order to ensure a balance between supply and demand in the coal market and to eliminate excess capacity, the state regulates coal production by administrative means. One is to close backward production capacity and release advanced production capacity in an orderly manner; the other is to further standardize and improve the order of coal production and operation issued jointly by the State Development and Reform Commission, the Ministry of Human Resources and Social Affairs, the Energy Bureau and the Security Supervision Bureau. The most important content is to re-verify the production capacity nationwide in accordance with 276 working days, that is, to re-verify the production capacity according to the coefficient of 0.84 of the original approved capacity. The country's compliance capacity is about 4.5 billion tons, which is 3.78 billion tons after being re-approved. This policy is of vital importance to the coal industry in our province, whether in terms of safety or in terms of maintaining the balance between supply and demand. It should be firmly adhered to. The breakthrough of clean and efficient utilization technology of coal makes Jincheng anthracite lump coal no longer have the advantage of

Jincheng area anthracite is a scarce coal species, and its reserves account for 1/4 of the province. It was originally positioned as the national anthracite base and fertilizer raw coal base. In this way, the main reason is that lump charcoal has high calorific value and good thermal stability, which can replace coke for direct gasification. It burns in the gasifier without crushing or collapse, has low sulphur content, and has little corrosion to chemical industry equipment. In the era when new coal gasification technology is not yet industrialized and mature, anthracite lump coal is a high-quality raw material for chemical plants, and has become a trader because of its scarcity and monopoly of resources. Chemical coal with high product value has always been a fragrant baboon in the chemical coal market. However, with the maturity and popularization of high-pressure gasification technology for pulverized coal such as Ningbo and Space Furnace, the state policy forcibly shuts down the fixed bed intermittent gasification process at the end of 2021. If new application fields cannot be opened, the anthracite lump coal market will face the market risk of volume reduction and price drop, and a cliff-breaking decline may occur in 2022. At that time, the difference of 400 yuan or higher between lump coal and foam coal will no longer exist, and even reverse, and the advantage will become the disadvantage. For example, Changping Coal Mine and Zhaozhuang Coal Mine of Jincheng Coal Group are now selling small coal particles after crushing into pulverized coal. Chengzhuang Coal Mine is also considering crushing system, which will become an important factor affecting the production and sales of Jincheng Coal Industry in the future. At present, the profits of coal enterprises in Jincheng area are mainly concentrated in lump coal. From the analysis of the relevant reports, after eliminating lump coal profits, there is little profit left. Therefore, finding a way out for lump coal is an urgent problem to be solved.