In September, the price of power coal will fluctuate downward

In August, the domestic coal market generally ran smoothly. The decline of power coal market has narrowed down, and there has been a gradual stabilization and recovery; the trend of different types of coal in coking coal market is polarized, and the price of high-quality resources such as coke fertilizer is still strong, and coking coal continues to operate under pressure.

In terms of power coal, the coastal market declined first and then rose.

The first half of the month continued the downward trend in July, and the spot price of Q5500 in Qinhuangdao fell 17 CNY/ton. From the point of view, the first reason is that the release rate of advanced production capacity in the main production areas of the western region has been further increased, and the national coal output has increased rapidly. In July, the output increased by 12.2% compared with the same period last year, and the growth rate has reached a new high in recent three years. The second reason is that the inventory of downstream terminals and transit ports is still high, and the peak period of coal use in summer is coming to an end, the power plant has begun. Third, the daily consumption of power plants is lower than expected, typhoon weather brings a lot of precipitation, the temperature is generally low, and the market has pessimistic expectations.

But after entering the second half of the month, the market reversed, the price stabilized and rebounded, and the spot price of Q5500 rose by 7 CNY/ton. The reasons are as follows: firstly, after typhoon, there are many high temperatures, which stimulate the demand for electricity, the turnover of coastal market has rebounded, and the purchasing price of power plants has increased due to the relative shortage of some low-sulfur coal resources; secondly, the downstream inventory has fallen, and the coal storage of main power plants in coastal areas has dropped by more than 2 million tons compared with the previous high point, thus forming a cost for coal prices. Thirdly, the State Administration of Coal Mine Safety has recently issued a notice that comprehensive supervision of coal mine safety will be carried out from late August to the end of September. At the same time, the 70th anniversary celebration is approaching, Sanxi region will enter a high-pressure situation, the market is expected to improve, and the power plant has begun to replenish the reservoir ahead of schedule to drive demand to rise.

From the September market, with the approaching of autumn maintenance of Daqin Line, the amount of coal entering the port will be limited, which will bring some support to the port and coastal market; but at the same time, September is also the off-season of traditional consumption of power coal, and downstream demand is hardly boosted. It is expected that the market will continue to operate under pressure and prices will generally show a downward trend of fluctuation. In coking coal, the price of coke rises first and then falls, and the blending of coking coal runs weakly.

In August, the coke market ushered in two rounds of short-term rebound, with the price rising by 200 CNY/ton. Towards the end of the month, the price fell again by 200 CNY/ton in two rounds. From the direct reason, on the eve of the Second Youth Congress of Shanxi Province, the surrounding coking enterprises limited production to promote price rebound; after the conference, supply resumed and prices fell synchronously. But from the root cause, steel prices continue to fall, steel mill profits continue to shrink, the pressure on the upstream continues to increase, resulting in extremely limited space for coke price adjustment, similar to last year's "six consecutive rise" conditions no longer exist. Throughout August, the coke industry was constantly restricted by environmental protection and policies, and the voice of price increase was high. However, the two rounds of price rise and fall were extremely difficult, which was strongly resisted by downstream steel mills. It also reflected that the profit margin of the current steel mills has been small. In early July, the survey data of steel mill production cost showed that besides threaded steel, the steel mill could maintain a small profit, hot coil, medium plate and other varieties had entered a loss, and the desire of the whole steel coke industry to suppress the price of upstream products was increasing.

Domestic coking coal prices are rising and falling, and the price of high-quality main coke in the main producing areas continues to rise, with a cumulative increase of about 50-70 CNY/ton. However, the sales of coking coal varieties are not smooth, and the prices of Changzhi lean coal and Shandong gas coal are still under downward pressure. At present, after the end of the Second Youth League, the limited coal mines in Shanxi area gradually resumed production in the early stage, and the coal mines in Shandong area started construction under the influence of typhoon gradually restored to the normal production level, and the supply gradually increased. Under this background, the coking coal market operates under pressure as a whole.

From the market situation in September, with the slight rebound of coal output, the weak operation of steel market and the fall of coke price again, the overall pressure of coking coal market, coking coal price still has downward risk. However, considering the approaching 70th anniversary of the celebration, the impact of high-pressure measures such as safety and environmental protection on production will be unavoidable. In addition, September is in the key period of price determination in the fourth quarter, major coal enterprises are more cautious in price adjustment. Comprehensive analysis shows that the domestic coking coal market is expected to remain relatively stable under pressure in September.