What does the bottom of the power coal absent in the peak season look like?

Domestic production increased, total and structural double optimization: From the perspective of coal production varieties, the coal produced in Shaanxi Province is basically power coal, and more than 70% of the coal produced in the whole province is in Shenfu Coalfield in northern Shaanxi Province, which belongs to high-quality, low-sulfur and high-calorie coal. With the reduction of fees of the three major road bureaus In the first half of the year, the structural shortage of low-sulfur and high-calorie coal, even the difficult situation of delivering coal, has been greatly improved.

Demand is depressed, and climate affects coal consumption in summer: According to this year's climate situation, El Nino weather first affected water and electricity in the second quarter, and the increase of spring rainfall directly promoted the sustained high incidence of water and electricity. Hydropower increment in the second quarter averaged over 20 billion kWh per month, directly affecting coal consumption of 6 million per month. The prolongation of the coastal rainy season makes the time point of entering high temperature in a large area of the country 10 days later than last year, which leads to a shorter time of high temperature. The influence of climate drags down the daily consumption of coal along the coast in summer by nearly 100,000 tons, which is deduced to be about 1 million tons of coal-fired power plants in China.

Inventory deteriorates, and multi-link accumulation is like a barrier lake: Throughout the inventory of each link, the characteristics of high base and low consumption speed make the inventory like a barrier lake. The only effective way to solve this problem is to start from the two poles. First, the supply-side production reduction or import quota is greatly tightened, which indirectly accelerates the inventory levels of each link. The second is the increase of demand-side consumption, which directly accelerates the depletion of inventory. From the current situation, the effective measures can be seen in the short and medium term mainly from the supply side, that is, the "70th anniversary celebration" caused by the tightening of production safety supervision and import quotas.

Summary: Far worries are approaching, and the market wind is looking at the long agreed price. After the market price falls below many support levels of long-term covenant price, downstream terminals may choose market purchasing to ensure normal inventory driven by profits, which may support the market to some extent, and price may rebound resistively. However, the price of the CPPCC is also adjusted dynamically with reference to spot prices, so the expectation of the bottom section still depends on the negotiation price of the CPPCC. Risk hints:

Import quota tightening; macro-demand exceeding expectation

Ushering in peak summer, we have been tracking the market constantly. In "Summer is coming, where is the peak season of coal", we have analyzed the structural contradictions of the market, and put forward the inference of the bottom range of coal prices at 550-570 CNY/ton. Continued rebound drive is insufficient, the peak season of coal market still needs to wait for further analysis of the possibility of the summer coal market to fall again in the peak season. But as time goes into mid-August, the autumn is over and the last is open, the three-volt heat is basically over, but the inventory in the middle and lower reaches still fails to show signs of effective de-industrialization, and the rumors of import tightening are also endless. Therefore, this paper will try to find the future trend and direction of coal prices by combing the main contradictions in the market. According to the data of the National Bureau of Statistics, in June 2019, the output of raw coal in China increased by 333 million tons, an increase of 10.4% over the same period last month. The growth rate increased by 7 percentage points, by 21 million tons annually, an increase of 6.7%, and the average daily output exceeded 11 million tons. In June, the output of raw coal continued to rise faster than expected, and the growth rate returned to the rising channel, which not only reversed the market's expectation of the continued shrinkage of raw coal output, but also reflected the characteristics of large output elasticity of pit mouth and strong controllability of supply ability.

From the point of view of coal production in different areas, Shaanxi Province has been in a state of production reduction before May due to the impact of safety inspection and production restriction after the mine disaster. In the first five months, it decreased by nearly 30 million tons compared with the same period of last year. However, with the end of safety inspection, the original plan ended on June 30, and the mass production in July. The reality is June production. A large increase was made in the production of 63.62 million tons in the same month, up 12.5% from last year, which brought the year-on-year reduction back to a small difference of only 11 million tons. From the point of view of Shanxi and Mongolia, the data in the first half of the year are more eye-catching. While Shaanxi has reduced 11 million tons from the same period of last year, the two places have achieved a cumulative increase of more than 90 million tons from the same period of last year, which has increased the total amount of the whole country by more than 60 million tons from the same period of last year.

In Shaanxi, especially in Yulin, the coal industry is a pillar industry. Coal mining accounts for more than 30% of the fiscal revenue. The sharp reduction of production in the first half of the year has led to a negative growth of fiscal revenue in Yulin. Under the background of international trade disputes and domestic economic transformation, it is very difficult for any region. To tolerate the long-term negative growth of the economy is to allow qualified large state-owned and private mines to increase production by 10% in accordance with the approved capacity after a major safety inspection in Yulin.

From the point of view of coal production varieties, the coal produced in Shaanxi area is basically power coal, and more than 70% of the coal produced in the whole province is in Shenfu Coalfield in northern Shaanxi Province, which belongs to high-quality, low-sulfur and high-calorie coal. With the reduction of fees and guarantee of supply by the three major road bureaus, the ability of Shaanxi coal to leave Shaanxi is enhanced, and it appears once in the first half of the year. The structural shortage of low sulphur and high calorie coal has been greatly improved, even the difficult situation of delivering coal. However, according to the recent port survey, the low sulfur coal types suitable for delivery Q5000 and Q5500 are relatively adequate. The delivery quotations on ZC1905 and ZC1907 may be difficult to reproduce in ZC1909, especially in several subsequent contracts. Import change, downstream suspected time difference operation. Since supply side reform in 2016, domestic coal production has been rapid.