Aftermarket pressure of power coal in buyer's Market

Coal demand increased in early August, but due to high inventory and the expectation of the end of peak season, the purchasing power of coastal power plants to northern ports and inland power plants to pits is not enough to support an effective rebound. Power plants basically control the purchasing rhythm or the rhythm of port price rise and fall, and are now in a passive position. 

Coal demand increased in early August, but due to high inventory and the expectation of the end of peak season, coastal power plants'purchasing of northern ports and inland power plants' purchasing of pits are not enough to support an effective rebound. Power plants basically control the rhythm of purchasing or the rhythm of port price rise and fall, and are currently in a passive position. De-inventory phase.

From the point of view of production area, the coal price in Ordos region of Inner Mongolia is weak, and some coal mines have slightly increased or decreased by 5 yuan to 10 yuan per ton according to the sales situation. It is understood that the demand for inland power plants is still acceptable, while the demand for ports is weak, the enthusiasm of traders in procurement is not high, coal mine shipments are general, and in the short run coal prices are weak. Coal prices in Yulin area are stable as a whole, with a small increase or decrease of about 10 yuan per ton in a few mines. Lump coal is relatively poor in shipment, and most coal mines have low inventory of normal production and marketing. They hold a wait-and-see attitude towards the future market. Coal prices in Shanxi have risen or fallen, and coal prices in northern Shanxi are relatively stable as a whole. Minority mines in Xinzhou have a smaller output affected by the accident, coal mine sales are better, and the price rises slightly by 10 yuan per ton. Coal prices in central and southern Shanxi are depressed, the demand for power plants is poor, coal washery purchasing is general, and the stock pressure of some coal mines is large, and the price is lowered. According to the analysis, there are several reasons for the pressure of coal price in this year's peak season.

First of all, raw coal production reached a new high in the year, close to the highest one-month level in history. Influenced by the release of advanced production capacity, the growth rate of raw coal production has accelerated significantly. In June, China's crude coal output was 333 million tons, an increase of 10.4% over the same period last year. The growth rate was 6.9 percentage points faster than that in May, with an average daily output of 11.11 million tons, an increase of 103 million tons over that in May. In the first half of the year, China's crude coal output reached 1.76 billion tons, an increase of 2.6% over the previous year. In the second quarter, the release of coal output accelerated. The China Coal Industry Association predicts that coal production will increase by about 100 million tons in 2019. Influenced by centralized release of advanced production capacity, the release of coal output is accelerated and higher than expected, and coal supply in the market is sufficient.

Secondly, the demand boost of downstream power plants is limited. In mid-July, the average daily coal consumption of the six power generation groups was about 600,000 tons, which maintained a low level in recent years. In July and August, the demand for thermal power and hydropower has reached the peak level in that year. Rainfall is on the high side this year. Hydropower generation increased significantly in June. Hydropower generation is expected to increase further in July and August, ushering in peak value, to some extent, to replace thermal power demand. In previous years, the price of power coal generally rose in May and June due to the influence of pre-stocking of power plants. In mid-July, the coal stocks of the six major power generation groups'coastal power plants remained at an absolute high level near 16 million tons. Because the available days of power plant stocks this year maintained a historic high level, the peak demand could be guaranteed to a greater extent, and the expected replenishment stocks in the later period would be weakened to suppress demand. After the structural reform of supply side in coal market, the inventory of downstream power plants increased, and the differentiation between the two increased. Influenced by the release of advanced production capacity, the inventory of the main production area has a slow growth trend, and the supply of coal is sufficient, which effectively relieves the pressure of coal supply.

Thirdly, electricity price downward suppresses electricity coal price. With the second comprehensive reduction of industrial and commercial electricity prices in the year, the price of electricity and coal in the upstream is directly suppressed. Large and medium-sized coal enterprises take the initiative to increase the effective supply of electricity and coal resources, reduce the price of power coal, power coal price center of gravity rapidly downward. Compared with the price in 2018, the downward trend is obvious. In 2018, the average price of the main contracts of power coal futures will remain near 620 yuan per ton, and the average price for the whole year of 2019 is expected to fall back to around 575 yuan per ton. Overall, the release of advanced coal production capacity in the later period is expected to continue to accelerate, stabilize the supply expectation of coal market, guarantee the demand in summer peak season, maintain the high level of inventory in recent years in downstream power plants, suppress and replenish the demand for inventory, and the power coal market shows the characteristics of peak season and maintain a weak position.