Trading sentiment cooling power coal prices accelerated downward

Recently, the demand of coastal coal market has not improved, the consumption of electric coal continues to refresh the historical low level in the same period, the market sentiment has cooled down, coupled with the increase of coal mine start-up rate, the port has sufficient supply in peak season, this cycle, the price of power coal accelerated downward. On July 17, Qinhuangdao Coal Network released the latest data, showing that the price index of power coal in the Bohai Rim closed at 577 CNY/ton, down by 1 CNY/ton. In spot, the spot price of 5500 calorific calorific calorific power coal is 601 CNY/ton, down 11 CNY/ton annually; the spot price of 5000 calorific power coal is 517 CNY/ton annually, down 13 CNY/ton annually.

This cycle, the trading price range of power coal specifications around Bohai Port is running smoothly. Among them, the price of Qinhuangdao Port 4500 Kcal power coal is 455-465 CNY/ton, 5000 Kcal power coal price is 510-520 CNY/ton, 5500 Kcal power coal price is 570-580 CNY/ton, average downward 5 CNY/ton; 5800 Kcal calorific power coal price is 600-610 CNY/ton, which is the same as the previous period. In the part of research and development of Qinhuangdao Coal Network, it is concluded that the overall balance of supply and demand in the coastal coal market remains unchanged in this period, and the price of power coal in the Bohai Rim region is under pressure, and the situation of vulnerable pullback is basically determined:

1. The pattern of wide supply and demand balance in the coastal coal market remains unchanged. In June, the output of raw coal increased by 10.4% compared with the same period last year, and the total output from January to June increased by 2.6% compared with the same period last year. The production capacity was released orderly, and the overall coal supply was loose. In June, thermal power generation was basically stable. Clean energy power generation grew in varying degrees, and coal demand was significantly squeezed by clean energy. 2. High reservoir and low consumption of downstream power plants remain unchanged. As of July 17, the daily consumption of the six coastal power plants is still at the same low level since 2013, the inventory is at the same high level since the statistical data, and the demand downturn remains unchanged. According to meteorological data, the typhoon will bring a new wave of rainfall, the recovery of civil power will slow down again, the peak production of industrial power will stagger, daily consumption will continue to operate at a low level, and the depot cycle of power plants will remain abundant. 3. Futures low consolidation. The futures market continued to operate in a weak position, with the main contract falling to 576.2 CNY/ton on the 17th, and the spot discount continued. The weak side of futures reflects the pessimistic market expectations, and the coal price will be in a downward trend in the short term.

Generally speaking, the normal state of "low daily consumption and high inventory" continues to suppress the release of procurement demand, coupled with the loosening of customs clearance of imported coal in some ports, price advantage continues to occupy the domestic trade market, while the shutdown situation originally occurred in response to inspection has improved, the coal mine start-up rate has increased, and the supply is inclined. Under the situation of increasing demand and sluggish demand, coal prices are expected to fall easily and rise difficultly in a short period of time. The Baltic Dry Bulk Index (BDI) continues its upward trend in this cycle (July 11, 2019 to July 17, 2019). On July 17, BDI closed at 2064, up 287 points, or 16.15%, over the same period last week. Molecular index: the Baltic Cape Ship Freight Index continued to rise rapidly, increasing 734 points to 4095 points from the same period last week, an increase of 21.84%. Average daily profit for cape-type vessels increased by $4670 to $31073. The Baltic Panamanian Ship Freight Index rose rapidly, increasing by 294 points to 2085 points, or 16.42%, over the same period last week. The average daily profit of Panamanian vessels increased by $2361 to $1661. Among the smaller ships, the price index of super-handy ships rose slightly, from 83 points to 928 points in the same period last week, an increase of 9.82%. The average daily profit of super-portable vessels increased by $987 to $10,704. In terms of domestic trade and shipping, the Ocean Coal Freight Index (OCFI) issued by Qinhuangdao Coal Trading Market shows that the domestic Ocean Coal Freight Index rose slightly during the reporting period (July 10, 2019 to July 16, 2019). On July 16, 2019, the freight index closed at 619.71, up 31.38 points, or 5.33%, compared with July 9. Specifically, compared with 9 July 2019, the average coal tariff of 50,000-60,000-ton ships on the Qinhuangdao-Guangzhou route increased by 1.5 CNY/ton to 28.5 CNY/ton on 16 July 2019; the average coal tariff of 40,000-50,000-ton ships on the Qinhuangdao-Shanghai route increased by 1 CNY/ton to 18.6 CNY/ton; and the average coal tariff of 40,000-ton ships on the Qinhuangdao-Jiangyin route increased by 4,000-50,000 tons. The average price of coal for ships is 20.6 yuan per ton, up 1.6 yuan per ton.

From Qinhuangdao Coal Network, we know that owing to the rising oil price and the diversion of part of the international shipping market, the tender sentiment of shipowners is getting stronger, which supports the slight upward movement of domestic marine coal tariff. However, due to the low acceptance of shippers, the mainstream shipping routes will choose not to book or postpone the ordering beyond the expected price. Price increases are limited.