Is coal price expected to rebound slightly or return strongly later this month?

After the National Day, the coal trading price in the port market declined slightly by 4 CNY/ton, and tended to be stable. The author predicts that with the improvement of downstream coal demand and the resumption of pulling enthusiasm, coal prices in the port market are expected to stabilize and stop falling, and to rise slightly in the latter half of the year.

1.Daily consumption of power plants tends to be stable. After the National Day, the daily consumption of the six power plants along the coast is about 650,000 tons, which is relatively stable due to the increase of civil power load and the resumption of production of industrial enterprises. With the further decrease of coal storage in power plants, the enthusiasm of subsequent haulage will be restored.

2.Shipping cost support. The upstream pit price gradually stabilizes, while the possibility of a sharp drop in Port coal prices is very small, supported by high shipping costs. In the case of coal prices hanging upside down, traders have reduced the number of shipments in the port direction and actively bid when the winter is approaching.

3. Winter storage is coming. In mid-late October, near the peak of heating coal in winter, some small and medium-sized power plants in the southeastern coastal areas began to replenish their stores, sending ships to pull coal northward one after another, and the number of port deliveries will gradually increase.

4. The imported coal declined slightly. In the third quarter, China's import of coal reached a new high; in the fourth quarter, the state increased its efforts to restrict the import of coal. Even though imported coal remained at a high level in the fourth quarter, the monthly imported coal volume was slightly lower than that in summer, and was expected to fall below 30 million tons. The domestic coal market pressure of oversupply was reduced.

5. The operation of hydropower is weakened and the power of fire and voltage is increased. In October, the rainfall in the South decreased significantly, the hydropower operation weakened, the pressure of thermal power increased, and the coal consumption of power plants increased steadily.

6. Although Qinhuangdao Port has a high inventory, it is mainly composed of Changxie Coal, and there is not much coal in the market. At this stage, coal delivery in the port market is characterized by low supply and demand, and shows a narrow fluctuation trend; once the downstream coal demand is pulled up, some high-quality coal will be in short supply and demand, and the port coal price will rise in stages.

The author believes that the rise in coal prices in the late part of this month is still a resistive rebound or a rational regression; the expected increase is about 3-5 CNY/ton, while the real coal market is good and coal prices are rising in the late November.