In 2019, the first half of the power coal price fluctuations

From the beginning of the year to the first ten days of March, the price of pit mouth and port power coal showed an overall oscillating upward trend. Taking the tax price of 5500 big cards pit mouth in Ijinholuo Banner and the tax price of 5500 big cards around Bohai Sea as an example, at the beginning of the year, the two prices were 334 yuan per ton and 585 yuan per ton, respectively. In the first ten days of March, the two prices were the highest respectively. It rose to 424 yuan per ton and 641 yuan per ton, rising 90 yuan and 56 yuan per ton respectively. Since mid-March, the double-high oscillation of coal prices at pithead and port has fallen back. The former has fallen to the lowest level since mid-June, 374 yuan per ton, a cumulative drop of 50 yuan per ton from the high point, and the latter has fallen back to the lowest level since mid-March. 595 yuan per ton, down 46 yuan per ton from the high point. Coastal coal prices first bottomed out in mid-June, followed by a slight rebound in pithead coal prices.

The reasons for fluctuation of coal price in the first half of the year are as follows:

1. slow resumption of production of coal mines in main producing areas, limited coal supply

2. normalization of total coal import control, reducing the impact on domestic market

3. rapid recovery of power and coal demand in coastal power plants after the Spring Festival

Before the middle of March, the reason for coal price oscillation The main reasons are as follows:

Firstly, after the accident of Shenmu Lijiagou Coal Mine on January 12, Shaanxi Coal Mine stopped production on a large scale, which resulted in a sharp shrinkage of coal supply and directly changed the structure of short-term power coal supply and demand, which is also the most important reason to promote the increase of coal price before the first ten days of March. After the Spring Festival, the coal mines in Shaanxi had to be ready to resume production, but the Yinman mining accident in Xiwu Banner of Ximeng once again affected the resumption process. Because of the large-scale and long-term shutdown and rectification of coal mines, the output of raw coal in Shaanxi Province decreased significantly from January to February compared with the same period last year. In March, the resumption of coal production in Shaanxi Coal Mine is still slow, and the coal supply is still restrained. Such a large reduction will inevitably have a huge impact on coal supply and demand, directly driving up coal prices in pits and ports.

Secondly, the normalization of total coal import control reduces the impact of imported coal on the coastal coal market, and creates certain conditions for the rebound of coal prices. Customs data show that from January to March this year, China imported 74.63 million tons of coal, a decrease of 1010,000 tons compared with the same period last year, a decline of 1.3%. The year-on-year increase in imports in January was mainly influenced by policy, with many coal that failed to pass through in December 2018 postponed to January this year. If calculated from December 2018 to March this year, China's total import of coal in four months was 84.86 million tons, a decrease of 13.51 million tons, or 13.7%. The reduction of coal imports has reduced the impact of imported coal on the domestic market and created certain conditions for the rebound of domestic coal prices. After the Spring Festival, the demand for electricity and coal in coastal power plants has rebounded rapidly, with a long-standing increase over the same period of last year. Since late February, the daily consumption of coastal power plants has increased significantly, even exceeding 700,000 tons on February 28, which is obviously higher than the same period in previous years. In early March, the daily consumption of coastal power plants in the six major power generation groups increased by nearly 15% year on year. After seven consecutive months of year-on-year declines since August 2018, year-on-year growth has been achieved again. The daily consumption of coastal power plants continued to rise, which supported the rise of coal prices to a certain extent.

After mid-March, the reasons for the high coal price fall are as follows:

First of all, the output of raw coal is gradually rising, and the supply of domestic power coal is gradually increasing, which makes the high coal price gradually face the pressure of callback. Data from the National Bureau of Statistics show that the output of raw coal in March, April and May increased by 2.7%, 0.1% and 3.5% respectively after a 1.5% year-on-year decline in the first two months. Especially in May, on the one hand, the coal production in Shaanxi continued to resume, and the output of coal in the table continued to rise. In May, the output of coal in Shaanxi rose to 46.39 million tons, an increase of 3.37 million tons (still 5.5 million tons lower than in April). On the other hand, the output of coal in Shanxi and Inner Mongolia, the two major coal producing areas, also rose rapidly. In May, the output of coal in Shanxi and Inner Mongolia rose rapidly. Mongolia's output in the table reached 84.77 million tons and 92.12 million tons respectively, a total increase of 12.97 million tons annually over April and a total increase of 18 million tons over the same period last year. This offset not only the year-on-year decrease in Shaanxi's output in the table, but also the decline in Shaanxi's output outside the table, and the coal supply increased significantly.

Secondly, the import of coal has been rising steadily and steadily, and it has increased from decline to increase year-on-year, further increasing domestic supply and increasing pressure of coal price reduction. Customs data show that in April and May, China's monthly coal imports rose from 23.48 million tons in March to 25.3 million tons and 27.47 million tons respectively, up 13.6% and 23% respectively. The rebound in imports of power coal, especially in May, has further increased the domestic supply of power coal, especially in coastal areas, and has put pressure on coal prices to fall. 

Thirdly, the demand for coal, especially for electricity coal, is relatively soft. With the recovery of power coal supply, the relationship between supply and demand changes rapidly, and coal stocks in coastal ports and power plants continue to rise, resulting in downward pressure on coal prices. The data show that in April and May, the electricity consumption of the whole society increased by 5.8% and 2.3% respectively, and the growth rate dropped by 1.8% and 5.3% respectively compared with March. With the slowdown of electricity demand growth, clean energy power generation has maintained a rapid growth momentum, which has significantly inhibited thermal power generation. In April and May, the thermal power generation capacity above the scale decreased by 0.2% and 4.9% year on year, respectively, and the ring ratio also showed a seasonal downward trend. Because coal for power generation accounts for nearly 60% of the total consumption of power coal, the reduction of coal for power generation means that it is difficult to increase the total consumption of power coal. On the one hand, domestic supply and import increased, on the other hand, consumption decreased.