Will the temperature drop make the coal price rebound?

In the near future, the downstream demand of power coal continues to be depressed, the stock of coal mines and transfer ports is generally on the high side, and the power coal price of Qinhuangdao Port falls to the low point of the year; however, with the temperature falling, the northern heating season begins, and it is expected that the coal price will stop falling and stabilize. This year, the fluctuation range of coal price in Qinhuangdao port is narrower than that in previous years. However, with the power plant adopting high inventory, long-term cooperation is the main way to replenish the storage, and certain imported coal is the supplement strategy. Under the background of stable supply, the leading role of demand on coal price becomes stronger. In recent years, with the continuous downturn in the enthusiasm of downstream power plants for the purchase of market coal, the price of Qinhuangdao Port's power coal continued to move downward.

As of October 24, the actual transaction price of 5500 kcal power coal in Qinhuangdao port was about 570 CNY/ton, down 17.5 CNY/ton on month, down 2.98%, 87.5 CNY/ton, down 13.31% on year-on-year basis. As of October 25, the inventory of six major coastal power plants was 16.2637 million tons, an increase of 440900 tons on a year-on-year basis; the daily consumption was 625200 tons, an increase of 122100 tons on a year-on-year basis; the inventory available days were 26 days, a decrease of 5.45 days on a year-on-year basis. It can be seen from Figure 2 that since this autumn, the daily consumption of coastal power plants has been higher than that of the same period of last year in general, and the performance is relatively ideal; however, due to the higher inventory than that of the same period of previous years, with the effective supplement of Changxie coal, the daily consumption has increased year-on-year, but it is still difficult to boost the enthusiasm of market coal procurement of key coastal power plants. On the other hand, due to the price difference between China's imported coal and domestic trade coal, coastal power plants have a strong purchasing power for imported coal.

Due to the expected tightening policy of imported coal in the early market, it has not been issued yet. In the first three months, China's power coal imports exceeded 30 million tons. With the influx of imported coal, the purchase of domestic trade coal by power plants is further squeezed. In the later period, the consumption of coal may increase. After the frost, the temperature will be more changeable and the cold air will be more frequent. With the temperature decreasing, the residential power consumption in the coastal area will increase, the power generation load of the power plant will increase, the consumption of coal will increase, or it can stimulate the purchase demand of the power plant to release. On the other hand, in the fourth quarter, there are tens of billions in Jiangsu, Hubei, Jiangxi, Henan and other places. The major projects of yuan investment scale will be started in a centralized way, and the demand for cement will be boosted, or the demand for power coal will be supported. In terms of imported coal, although no relevant policies have been issued at present, the possibility of tightening the coal import policies in the later period is still not ruled out; at the same time, with the decline of domestic coal price, the prices of foreign mines are firm, and the price difference between domestic coal and imported coal is narrowed. It is understood that the price difference between imported coal of the same quality and domestic coal in South China has been narrowed to about 30 CNY/ton. With the decrease of temperature, the coal consumption is gradually transiting to the peak period, and the demand of power plant or storage replenishment is released in the later period; meanwhile, considering that the current price has fallen to the lowest level of this year, the coal price may continue to operate in a weak way in the short term, but the space for further decline is limited.