Who is suppressing the coastal coal market?

Since 2019, the coal market has changed from "supply-led" to "demand-led". Under the background of industrial restructuring, the demand of downstream coal industry is not expected. During the summer rush season, coal prices fluctuated and fell. Based on the high level of downstream inventory and the adjustment of import coal policy, the trend of coal market has become the focus of attention of all parties concerned. According to industry analysis, with the release of pithead capacity in the later period, the structural shortage of some coal types in the port will be gradually alleviated. At the same time, the high inventory in the downstream will be normalized, the demand release will be slow, and the pattern of oversupply may continue until the end of the year.

The growth of coal demand is weak 

This summer, the coal market "peak season is not strong", and the coastal coal market shows the trend of increasing supply and weakening demand. It is understood that the weakening of coal demand is mainly affected by three factors: the suppression of thermal power growth by new energy substitution, the suppression of power generation growth by external electricity extrusion, and the suppression of power consumption growth by macroeconomic pressure. The substitution effect of new energy to thermal power is strengthening, and the substitution effect of new energy in coastal areas is beyond expectation. The data show that in January-June, the national new energy power generation increment was 57.877 billion kWh, accounting for 53.8% of the total power generation increment, and thermal power only accounted for less than 5% of the total; Jiangsu's power generation increased by 2.89 billion kWh, and the new energy generation increased by 7.2 billion kWh, resulting in a reduction of thermal power generation by 3.06 billion kWh; Zhejiang's power generation decreased by 4.650 billion kWh, and new energy generation accounted for less than 5%. The increase of 6.02 billion kilowatt-hours resulted in a reduction of 13.11 billion kilowatt-hours in thermal power generation, a reduction of 15.36 billion kilowatt-hours in Guangdong and an increase of 104.5 billion kilowatt-hours in new energy generation, resulting in a reduction of 28.97 billion kilowatt-hours in thermal power generation.

Cross-regional transmission increases rapidly, and the input increment of coastal market is obvious. In June, China's cross-regional transmission of 42.2 billion kilowatt-hours increased by 7.45% year-on-year, while the cumulative transmission of 224.3 billion kilowatt-hours in January-June increased by 11.15% year-on-year. Under the background of "dual energy control", the import of foreign electricity in the Yangtze River Delta and the Pearl River Delta has increased significantly. Taking Zhejiang and Jiangsu as examples, the total increment in February-June was 8 billion kWh, accounting for 60% of the 13.35 billion kWh increment in January-June. The growth rate of local power generation is obviously squeezed out by the external electricity in the main coastal provinces and cities. From January to June, Shanghai, Jiangsu, Zhejiang and Guangdong provinces and cities used 887.3 billion kilowatt-hours of electricity, an increase of 23 billion kilowatt-hours compared with the same period last year. From February to June, net imports of foreign electricity increased by 175.5 billion kilowatt-hours compared with the same period last year, exceeding the increase of electricity consumption, resulting in a reduction of 21.6 billion kilowatt-hours of local power generation.

In addition, the effect of infrastructure underpinning is lower than expected. The data show that the growth rate of infrastructure investment continued to decline by 3.8% and 0.3% annually in July, real estate investment growth by 10.6% and annular ratio by 0.3%, manufacturing investment growth by 3.3% and annular ratio by 0.3% and overall fixed assets investment growth by 5.7% and annular ratio by 0.1%. The reporter learned from China Coal Transport and Marketing Association that in July, most parts of the country entered high temperature weather, and the level of electricity and coal consumption increased, but the demand was not as expected due to the impact of heavy rainfall and high hydropower incidence.

The supply of coal increased faster than that of coal

In the first half of this year, the domestic new production capacity accelerated and the coal increment was obvious. According to the latest data released by the National Bureau of Statistics, from January to July, the output of raw coal above the national scale reached 2088.55 million tons, an increase of 4.3% over the same period last year. Two safety incidents around the Spring Festival resulted in unexpected resumption of coal production in Shaanxi and other producing areas. The output of raw coal in Inner Mongolia and Shanxi maintained a relatively high growth rate, which made up for the shortage of coal in Shaanxi in the first half of the year. From January to July, the cumulative output of raw coal in Inner Mongolia was 58,467,000 tons, an increase of 11.9% compared with the same period last year; the cumulative output of raw coal in Shanxi was 55,549,800 tons, an increase of 9.2% compared with the same period last year.

Shaanxi Statistical Bureau pointed out that the output of raw coal in Shaanxi Province has fallen sharply since the beginning of this year due to the impact of safety accidents in the coal industry. In the first half of the year, the output of industrial raw coal above the scale of Shaanxi Province was 266.555 million tons, down 8.2% from the same period last year, which was 23.817 million tons less than the same period last year. With the acceleration of the resumption of production and the introduction of the policy of "one guarantee, one expansion and three supplements" by the Shaanxi Provincial Government, the output of raw coal has risen month by month. At present, the release of coal mine productivity in Yulin area of Shaanxi Province is accelerating. According to market news, all coal pipe tickets in Yulin area of Shaanxi Province have been released, and coal pipe tickets will be issued according to the approved production capacity throughout the year, no longer on a monthly basis. Recently, the list of the sixth and seventh batches of coal mines has been published one after another, and the production limit of coal mines has also been relaxed. It is noteworthy that the State Administration of Coal Mine Safety has recently issued the Notice on Comprehensive Supervision of Coal Mine Safety Production. In order to prevent coal accidents, comprehensive supervision of coal mine safety production will be carried out from late August to the end of September. Zhang Di, senior director of Market Research Department of China Huaneng Group Fuel Department, believes that the safety and environmental protection inspection will continue to be strengthened in the later period, which will have a certain impact on coal production capacity release. In terms of railway transport capacity, the distance between Menghua Railway and China Railway has gone further. Coal in coastal areas will become more relaxed after the Menghua Railway is put into operation. It is reported that the first year of operation of the Menghua Railway will target 40 million tons, reaching at least 60 million tons by 2020, and then rapidly reaching a scale of more than 100 million tons. Zhang Feilong said that the "two lakes and one river" coal transport tension will ease. More than 50% of the coal transported by Menghua Railway arrives in Hubei, 30% in Hunan and 20% in Jiangxi. Compared with other modes, the Menghua Railway has absolute advantages in transporting to Jingzhou. It still has certain advantages in transporting to Yueyang, and the advantages in transporting to Jiujiang are more obvious.