Increasing Electric Coal Consumption Drives Coal Inventory Downward

Recently, there are many rainfalls in the south of China, and floods are serious. The output of hydropower is uncertain, which weakens the extrusion of thermal power. Electric coal consumption is stronger, end-user purchasing demand is released slightly, which stimulates the enthusiasm of purchasing northward. Based on the pressure of transportation cost, the enthusiasm of coal export is limited. Therefore, under the market pattern of increasing demand and limited supply, coal stocks move downstream to support stable, moderate and slight rise in coal prices. The price of power coal rose steadily, moderately and slightly. On June 20, Qinhuangdao Coal Network released the latest data, which showed that the price index of power coal around Bohai Sea closed at 577 CNY/ton, which was the same as the previous period. The spot price of 5500 calorific calorific calorific calorific calorific calorific calorific calorific calorific calorific calorific calorific calorific value 5000 calorific calorific calorific calorific calorific calorific value coal is 596 CNY/ton.

This cycle, the trading price range of power coal specifications in Bohai harbor has steadily increased, with an increase of about 5 CNY/ton. Among them, the price of Qinhuangdao Port 5000 kcal power coal is 505-515 CNY/ton, 5500 kcal power coal price is 575-585 CNY/ton, 5800 kcal calorific power coal price is 600-610 CNY/ton, which is the same as the previous period; 4500 kcal power coal price is 455-465 CNY/ton, ring ratio is up 5 CNY/ton. The analysis shows that the market activity is still cool in this period, and the following factors have contributed to the stabilization of the comprehensive coal price in the Bohai Rim region after a short fall.

1. Thermal power generation tends to increase and coal demand has improved slightly. With the advent of rainy season in East China and South China, the flood discharge function of hydropower stations will affect the output of hydropower and the peak regulation of thermal power will rise. The data of Qinhuangdao Coal Network show that the daily consumption of coastal power plants of six power groups has stabilized at the level of over 600,000 tons for 10 consecutive days, and the available days have dropped to about 26 days. The demand for electric coal has slightly improved to support the weak and stable price of coal.

2. Inventory of northern ports decreased and supply capacity of reserve cargo decreased. As of June 19, the coal stocks in Qin, Tang and Cang ports were less than 22 million tons, which was still higher than the same period last year, but decreased by nearly 2 million tons compared with the beginning of last month. It was also reported that the customs would strengthen the supervision of coal imports, weaken the supplementary effect of imported coal, and supply capacity of various links. Reduce the motivation of terminal part procurement enthusiasm.

3. Power coal forward contracts are bullish and market pessimism is alleviated. As the bad news gradually digested and the peak season of coal consumption approached, the forward contracts of power coal continued to break through the average line upwards. As of June 19, the ZC909 contract went up to 601.2 CNY/ton, and the market pessimism was gradually released.

Generally speaking, the short-term release of hydropower is insufficient and the output of thermal power increases. But now the southern region has entered the Meiyu season, and the incoming water is in good condition. On the premise of ensuring flood control safety, hydropower stations continue to optimize the operation mode of units, and the output will gradually stabilize. It is expected that in the future, the extrusion of thermal power by hydropower output will be weakened, coupled with the increase of summer temperature and the increase of residential electricity demand, and the consumption of coal and electricity will remain at a high level. With the resumption of production of coal mines, the tendency of coal supply increases. Under the situation of high consumption and supply of electricity and coal, it is expected that the price of coal will still be dominated by narrow fluctuation. The Baltic Dry Bulk Price Index (BDI) has stopped falling and rebounded in this cycle (June 13, 2019 to June 19, 2019). On June 19, BDI closed at 1179, up 99 points, or 9.17%, from the same period last week. Molecular index: The Baltic Cape Ship Freight Index soared by 305 points to 2051 points, or 17.47% over the same period last week. Average daily profit for cape-type vessels increased by $2504 to $16,493. The Baltic Panamanian Ship Freight Index continued to decline, down 39 points to 1110 points, or 3.39%, from the same period last week. Average daily profit of Panamanian vessels decreased by $319 to $8917. Among the smaller vessels, the price index of the super-handy vessels rose slightly, increasing by 24 points to 736 points, or 3.37%, compared with the same period last week. Average daily profit for super-portable vessels increased by $286 to $8392. In terms of domestic trade and shipping, the OCFI issued by Qinhuangdao Coal Maritime Trading Market shows that during the reporting period (June 12, 2019 to June 18, 2019), the domestic marine coal tariff index declined slightly. The freight index closed at 734.43 on June 18, 2019, down 50.26 points, or 6.4%, compared with June 11. Specifically, compared with June 11, 2019, the average coal tariff of 50,000-60,000-ton ships on the Qinhuangdao-Guangzhou route decreased by 0.8 CNY/ton to 35.7 CNY/ton on June 18, 2019; the average coal tariff of 40,000-50,000-ton ships on the Qinhuangdao-Shanghai route decreased by 0.8 CNY/ton to 25.8 CNY/ton on the Qinhuangdao-Jiangyin route; and the average coal tariff of 40,000-ton ships on the Qinhuangdao-Jiangyin route closed by 26.8 CNY/ton on June 18, 2019. Ring down 1.8 CNY/ton.