Power coal down channel open

Although the daily coal consumption of the power plant is relatively strong compared with the same period last year, and the heating and cargo preparation in winter is imminent, the demand side will play a role in boosting. However, under the background of market-oriented power trading, the enterprise procurement is more cautious, and the expected supply situation is better, the price of power coal has entered a downward channel. Since the reform of the supply side, the coal price has been rising continuously, but under the restriction of the overall requirement of reducing the price of electricity, the linkage mechanism of coal and electricity has basically come to a standstill. The operating pressure of coal-fired power enterprises continues to increase, and most of them are in a state of loss. With the increase of the number of coal-fired power plant bankruptcies, the power market-oriented transaction is imminent. At the end of September, the executive meeting of the State Council decided to improve the formation mechanism of the feed in tariff for coal-fired power generation, promote the market-oriented trading of electricity, reduce the power consumption cost of enterprises, change the current benchmark feed in tariff mechanism to the market-oriented mechanism of "benchmark price + fluctuation up and down", and at the same time, it is required not to rise temporarily in 2020, especially to ensure that the average industrial and commercial tariff will only fall but not rise.

In this context, coal power enterprises must control the cost of coal. Generally, the annual benchmark price of long-term cooperation is determined in the fourth quarter, which has a great impact on the procurement cost of medium and long-term coal power enterprises. If the annual benchmark price of long-term cooperation is not lowered to a certain extent, it will bring great pressure to coal power enterprises to improve the current difficulties. Moreover, once the price difference between the long-term cooperative price and the market coal price has expanded, the implementation volume of the long-term cooperative contract of power enterprises may be affected. Therefore, the degree of coal price marketization in the later period will be further improved and gradually return to fundamentals. In addition, the policy of importing coal also needs to be focused. Recently, the data of coal import in September released by the General Administration of Customs shows that the coal import in September is still above 30 million tons, and the total import volume from January to September is over 250 million tons. It is understood that at the end of August, the import quota of some ports has been exhausted, but the coal import volume in September is still stable. In the later stage, we will focus on whether the import control policy is strictly implemented. If the coal import is stable, it will further weaken the purchase demand of downstream power plants for domestic trade coal, thus transmitting the price pressure from the demand side to the supply side. In 2019, the supply side reform of the coal industry has shifted from total capacity reduction to structural optimization and adjustment. Although the elimination of backward production capacity continues, with the rapid release of high-quality production capacity, the supply capacity of the production area has been significantly enhanced. After the national day, the production of the coal mine that has been shut down is gradually restored to normal production.

The supply reduction caused by the strict inspection of safety and environmental protection will be gradually restored. According to the data analysis since 2010, the output of raw coal from November to December is generally at a relatively high level, and the supply is stable and sufficient. From the point of view of the port situation, the coal inventory is accumulated passively. As of October 15, the coal inventory of Qinhuangdao port was 7.11 million tons, a substantial increase of 1.4 million tons on a year-on-year basis, and that of northern port was 3.8 million tons higher than that of the same period last year. It should be noted that in the near future, the number of anchor ships in the northern port has remained at a low level. As of October 13, the number of anchor ships in the important ports around the Bohai Sea is about 70% less than that of the same period last year, which shows that the purchase demand for coal in the northern port from downstream power plants is extremely low. The low turnover of northern ports reflects the limited demand for actual procurement. There is still potential positive support for the demand. With the overall fall of high temperature weather, the demand for electricity for residents has declined, and the traditional demand off-season has come. However, there are still optimistic expectations for demand. On the one hand, since late September, the daily coal consumption of six coastal power plants has been on the high side by about 20% year-on-year, which forms a psychological support for the market; on the other hand, the heating season is approaching, and the winter stock demand is about to start. However, from the perspective of industrial boost, the monthly production data of cement, pig iron and other varieties are observed, which has a very obvious seasonal rule: generally, the production will decline significantly in the fourth quarter, and the industrial demand boost is lack of sustainability. From the historical data, the actual increase of coal consumption of six coastal power plants usually occurs in December. When there is no large area of low temperature in the south, the intensity of heating theme will be greatly reduced.