What is the sharp fall in coal prices in the second half of the year?

In the second half of the year, although the demand for coal in the lower reaches is increasing, the increase in supply is much larger than the demand, which leads to the continuous accumulation of user inventory, and the oversupply of coal market is thus formed. The increase of both internal production and external production not only results in poor water quality of coal in the market, but also blocks the water quality of relatively cheap Changxie coal. Subsequently, the transportation of coal from the north to the south is not smooth, the main coal transportation railway and port coal transportation decreased year on year, and the price of coal fell all the way. The price of coal in 5500 kcal market has dropped from 614 CNY/ton in early July to 555 CNY/ton at present. Up to now, there is no sign of improvement in the market, and some users will receive goods by 5-8 CNY/ton according to the index. What is the reason for the continuous decline of coal price? The price advantage of imported coal is obvious. In the first half of the year, the quantity of imported coal was relatively stable, which not only complemented the coal resources, met the demand for coal, but also restrained the sharp rise of domestic coal price. Since the third quarter, a large number of low-cost imported coal has entered the domestic market, causing users to rush to buy, and the imported coal seems to be out of control. Under the guidance of the price difference between imported coal and domestic coal, the CIF price of imported coal is even lower than that of Changxie coal, which has become the priority target for users in coastal areas.

In the third quarter, the total import volume reached 96.11 million tons, an increase of 13.29 million tons year on year. The impact of imported coal on the domestic coal price began to enlarge, resulting in an increase in the inventory of southern power plants and a decrease in the number of domestic coal purchases. Most of the power plants implement the strategy of "maintaining rigid haulage of Changxie coal, purchasing a large number of imported coal and buying market coal sporadically", which makes the domestic coal market stagnant and cold, not only the market coal is ignored, but also the number of ships that transport Changxie coal from Bohai port to port is sharply reduced. The pressure of supply over demand increases. In the first half of the year, the market supply was affected by factors such as mine disaster and coal management ticket restriction, but the shipping of Bohai port remained normal, and the power plant inventory has been in a slow growth trend. In summer, although the weather is hot and the air conditioning load increases, the power of water and electricity offsets the benefits brought by the high temperature in summer. In the third quarter, although the coal price has rebounded 3-6 CNY/ton for three times, it is only a resistance rebound, and the overall trend of coal price operation is still falling; from 614 CNY/ton at the beginning of July to 587 CNY/ton at the beginning of October; since October, the market pressure has increased, and the decline of coal price has increased. At the same time, the coal storage of power plants is increasing; up to now, the total coal storage of national key power plants has risen to 94 million tons, and the total coal storage of six coastal power plants is 16.78 million tons, with 29 days of coal storage available. The coal storage of power plants basically covers the first and middle of November. The coal transportation tends to be loose.

In the second half of the year, the upstream safety and environmental protection inspection gradually tended to be normalized, and the impact on the coal supply was weakened; in addition, the railway and port transportation capacity were sufficient, which made the coal transportation more smooth. Especially after the overhaul of Daqin line, we will try our best to make up the deficit, while Shuohuang line and Mengji line are also working hard to increase the coal transportation volume and keep increasing the coal trucks to the port. At the same time, the downstream demand is weak, the number of ships arriving at the port is reduced, and the coal transfer in and out of the port around Bohai Sea is higher than that of the port around Bohai Sea, resulting in coal overstock; especially, the Mongolian coal stored in the site is easy to self ignite, and the traders and coal generating units are forced to reduce the price of sales, resulting in the alternate decline of the actual transaction price and index, resulting in a vicious cycle.