Coal futures will continue to be strong

Since September, the coal market has gradually improved. The main contracts of domestic coke, coke and power coal futures have increased by 6.03%, 3.82% and 0.82% respectively. Analysts said that in the near future, coal prices continued to rise against the background of high daily power consumption of the six major power stations and continued decline of coal stocks in ports. Looking forward to the future, coal prices are expected to remain strong against the background of weakening demand, limited supply and declining inventory.

The overall recovery of the coal sector, Wenhua financial and economic data shows that since August 28, the coal futures sector index has shown a unilateral upward trend, reaching a peak of 195.64 points on September 12, reaching a new high since August 15, after reaching a new low of 185.79 points in the middle of the trading period. On spot, coal prices continued to rise slightly. Data from China Coal Resources Network show that, as of September 11, the open warehouse price of Shanxi Power Coal (Q5500) from Qinhuangdao Port was 581.0 CNY/ton, up 6.0 CNY/ton from the previous week. Power coal price index: CCI5500 (including tax) is 586.0 CNY/ton, up 6.0 CNY/ton from the previous week. On the production area, the weak caking coal in the southern outskirts of Datong, Shanxi Province, was 415.0 CNY/ton, down 2.0 CNY/ton from the previous week, while the Dongsheng bulk concentrate in Erdos, Inner Mongolia, was 420.0 CNY/ton, up 1.0 CNY/ton from the previous week. International coal prices, Newcastle Port power coal spot price of $65.66 per ton, up 0.69 dollars per ton from the previous week. As of September 11, the main contract futures for power coal had risen by 9.4 yuan per ton.

In view of the recent trend of coal price rise, Xinda Securities coal industry analysts Zuo Qianming, Zhou Jie and Wang Zhimin analyzed that, on the one hand, the six major power consumption daily run at a high level. Last week, the average daily consumption of six major power plants in the coastal areas was 701,000 tons, an increase of 31,000 tons, or 4.6%, compared with 670,000 tons in the previous week, an increase of 87,000 tons, or 14.2% over 614,000 tons in the same period in 2018; on September 12, the daily consumption of six major power plants was 731,000 tons, an increase of 68,000 tons, or 10.3%, compared with the previous week, an increase of 158,000 tons, or 27.6% over the same period in 2018. Available days were 21.7 days, down 2.9 days from the same period in the previous week and 4.9 days from the same period last year. On the other hand, imported coal still maintained a high growth rate in August, and port coal stocks continued to decline. According to the data released by the General Administration of Customs on September 8, China imported 32.952 million tons of coal in August, an increase of 14.9% over the same period last year and an increase of 0.2% annually. Last week, the inventory of major domestic ports (Qinhuangdao, Caofeidian and Guotou Jingtang Port) declined slightly, with an average of 118.555 million tons in the week, down 480 million tons, or 3.9% from the previous week's 123.355 million tons; in terms of the inventory of downstream power plants, the average coal inventory of the major power plants on Saturday was 15.996 million tons, down from the previous week. 291,000 tons, a decline of 1.8%, an increase of 912,000 tons, an increase of 6.0% over the same period in 2018. As of September 11, the throughput of Qinhuangdao Port had dropped by 0.9 million tons to 481,000 tons annually.

Looking forward to the future market, Zuo Qianming, Zhou Jie and Wang Zhimin said that coal prices may remain strong under the background of weakening demand, limited supply and declining inventory. On the one hand, important activities are coming, environmental safety supervision in the main producing areas has been strengthened, some coal mines have controlled the pace of production, and coal prices have stopped falling and rising. In addition, the coal stocks of the six major power plants in the downstream have fallen below 16 million tons, and the hydropower industry is about to enter a period of weakness. Northeast China will start the winter storage and transportation ahead of schedule. Civil lump coal demand will be released and the price will rise slightly. Overlapping the main export railways, centralized maintenance will be gradually carried out in autumn. Under the multi-factor effect, the mood of the producing areas will turn better and the overall situation will be warmer. On the other hand, after autumn, the daily consumption of power plants has fallen, and the off-season has come. Entering September, the high temperature in most areas of China has disappeared, the demand for refrigeration and electricity has been reduced, and rainwater is more in some areas. The follow-up power plants will welcome unit maintenance, the demand for power coal will gradually transit to the off-season, and the power plants continue to purchase and replenish the reservoir is insufficient. Overall, at this stage, coal supply and demand will shrink synchronously, especially under the expected tightening of the supply of origin, port coal prices may remain strong.

As far as coke market is concerned, Wang Yongliang, Ministry of Iron and Steel Industry of Gold Recruitment Futures, said that the government should strengthen macro-control, strictly control real estate to increase infrastructure and insurance economy, and open the window of monetary easing. More than September, the implementation of environmental policy of production restriction, steel production continued to decline, and demand exceeded expectations, inventory release faster. Last week, coke enterprises'productivity utilization and daily average output fell slightly, inventory increased slightly, shipment was relatively smooth, and the national average profit of coke per ton was 84.41 yuan. On the port side, stocks have increased slightly. In the peak season, black trend is expected to interact with each other, and short-term coke futures or continuation of strong volatility trend are expected.

Coking Coal, Ruida Futures analysts said that the spot market of coking coal is stable and weak, raw coal resources in some areas are relatively tight and quotations are relatively strong, and coking coal prices are relatively stable. Previously, coking coal prices in various regions have decreased in varying degrees, and the overall inventory level of the mine is not high. Recently, coking coal prices or stable operation.