Review of China Electric Coal Index in July 2019

On August 14, 2019, the price monitoring center of the State Development and Reform Commission announced that the price index of China's electric coal in July was 488.13 CNY/ton, down 0.79% from the previous year and 8.34% from the previous year. Among the 31 provinces and municipalities monitored (excluding Beijing), the number of downward price areas decreased by 4 to 14, and the maximum downward price narrowed to 30.98 CNY/ton; the price of electricity and coal in the other 17 areas all went up, rising to less than 45.40 CNY/ton. This month, the number of coal prices has changed slightly from upstream to downstream, and the range of coal price activities across the country has gone up as a whole, reflecting a slight tightening of coal supply in the market and an increase in the upward momentum of China's electricity and coal index.

The price of coal in the three western regions fluctuated narrowly. Among them, the coal prices in Shanxi and Mengxi have steadily declined slightly, while the coal prices in Shaanxi have slightly risen, up 5.94 CNY/ton. The analysis shows that the main reasons leading to the divergence of coal prices in the main producing areas include the following two aspects: 1. The main producing areas of Shanxi and Mengxi coal are affected by weak downstream demand and high inventory, the coal sales in the market are not in peak season, and the coal price runs smoothly; 2. The traditional coal-burning peak season in February and July, some downstream uses. Household subsidy, Kula transportation, coal management tickets, environmental policy restrictions on production, Railway Tariff Reduction and other factors are intertwined. Shaanxi coal market sales are more optimistic, consumption has increased, coal price upward momentum has increased, and prices have increased slightly.

Coal prices fluctuated slightly in the eastern coastal consumer areas, with the fluctuation range of coal prices less than 7.66 CNY/ton. The analysis shows that the main reasons for the fluctuation of coal prices in coastal consumption areas include the following two aspects: in January and July, the average daily consumption of coastal power plants rose by 40,000 tons to 670,000 tons per month, which was 100,000 tons less than the same period last year, while the average monthly inventory was about 2.85 million tons higher than that in the same period last year, and the loose coal market pattern remained eastern. Coal prices in the coastal areas of the Ministry of Coastal Consumption are the main factors for the decline; 2. Despite relatively loose demand, the rise of temperature still brings a glimmer of vitality for the downstream depot replenishment, the peak shaving effect of thermal power is prominent, and the periodic demand is tightening to boost the coastal coal prices.

Qinhuangdao Coal Network analysis shows that in July, power plant inventory was running at a high level, coal supply exceeded demand, market pessimism expanded, and China Electric Coal Price Index declined slightly in July. In August, the downstream temperature oscillation operation, residential electricity by high temperature and typhoon weather alternately, electricity consumption will fluctuate, coal prices in coastal coal market will oscillate.