Coal market is hard to be optimistic for a long time

In November, the price of imported coal stopped rising and fell. On November 9, at the 2019 China import coal summit, a supporting activity of the second China International Import Expo, China Coal Industry Association and China coal transportation and Marketing Association jointly released the China Power Coal Import CIF index (CICI). According to CICI's first data, on November 8, the CIF prices of 5500, 5000 and 4500 imported coal from East and South China all decreased significantly. The reason is that the overall supply is loose, the purchase demand is insufficient, and the foreign trade freight is down. " As of November 10, China's key power plants stored 97.92 million tons of coal, 4.3 million tons more than last year's highest point, and 3.45 million tons per day, a little lower than the same period last year, with 28.30 days available, Zhang Mohan, an Yi Coal Research Institute, told reporters. In a word, the terminal power plant has insufficient power to replenish the reservoir. In terms of procurement, at the end of October, local customs heard that the import coal quota of this year was used up and the import coal was restricted from unloading. In a short time, the uncertainty risk of import policy increased, the advantage of imported coal weakened under the narrowing of the superimposed price difference, the downstream procurement was suspended and the wait-and-see was the main thing. The procurement demand from China in the international market decreased sharply, resulting in the decline of international power coal price 。 At the same time, the international dry bulk transportation market is in a recession in the near future, the overall turnover in the Pacific market is reduced, and the freight rate of various ship types is mainly reduced, with different rhythm. Capes are weak, with the BCI index plummeting 506 points last week. Panamax as a whole was rarely traded, and freight rates continued to decline. The Pacific market continued to be depressed, and the price of handy ship fell continuously. This week, the decline gradually narrowed. As of November 12, the BDI index dropped 570 points from the same period last month, reflecting the pessimistic attitude of all parties in the shipping market. In contrast to the domestic market, coal prices have stabilized after a deep fall.

The domestic supply is loose as a whole, and the demand for winter storage and the shortage of some high-quality coal are the main reasons for the coal price to stop falling and stabilize. " In terms of pithead, after the National Day holiday, the production of coal mines in the main production area was accelerated, the overall supply was loose, and the price of pithead continued to be lowered, Zhang said. In November, due to the close to the end of the year, the coal mines in the main production area implemented the strategy of fixed production based on sales, the arrival of the northern heating season boosted the overall mine mouth price to be firm, and the number of coal mines with price reduction decreased significantly on a month on month basis. In addition, in winter, environmental protection limited production, the mine mouth price stopped falling and stabilized. In terms of ports, due to the low enthusiasm of traders in shipping, the coal transfer in volume of ports around Bohai Sea decreased by about 150000 tons per day compared with the previous average, resulting in a decrease of 1 million tons in the overall inventory, structural shortage of some high-quality coal with high performance price ratio, and the attitude of traders to hold up the price rose again. However, Zhang Mohan believes that the downward pressure of coal price in the later period is still large and the situation is not optimistic. Since this year, coastal terminal power plants have maintained a high inventory strategy. As of November 13, the total inventory of six coastal power plants was 16.6999 million tons, a slight decrease of 78700 tons on a month on month basis, and the available days of coal storage remained at about 27-28 days, while the inventory of national key power plants had climbed to the historical peak ahead of time, with little room for replenishment. Due to the port price falling below the annual long-term cooperative price, there is a small amount of demand released from the power plant, but the demand for replenishment is still small under the condition of high inventory. In addition, the annual coal ordering meeting is about to be held, and it is expected that large-scale centralized procurement of power plant is still difficult in the short term.