Coal supply capacity will continue to increase under policy control

In 2016, affected by the capacity reduction policy, the output of power coal decreased significantly. Since 2017, the coal mine has resumed the 330 working days system, and the output of power coal has maintained a steady growth trend. From January to September 2019, the national power coal output reached 1.779 billion tons, a year-on-year increase of 9200 tons, or 4.5%. With the continuous enhancement of domestic coal supply capacity, it is expected that in 2020, the power coal output will be 2438 million tons, a year-on-year increase of 3900 tons, or 1.63%. With the orderly release of advanced coal production capacity, continuous optimization of coal supply structure and strict safety supervision, it is expected that the domestic coal supply guarantee capacity will be steadily improved in 2020. In terms of imported coal, after 2020, in order to control the price of power coal within the green range, the policy of imported coal may be adjusted flexibly. In order to ensure the cost of downstream power enterprises, the import of direct power plants may be relaxed to some extent. It is expected that the coal import will remain high in 2020, but the growth rate will be slowed down. As coal is an energy industry related to the national economy and people's livelihood, the national policy plays an important role in the supply of power coal.

In 2015, coal overcapacity. In 2016, the policy began to reduce domestic coal supply by eliminating overcapacity, implementing 276 working days system, strengthening security inspection and environmental protection and other measures. After 2017, there was a shortage of supply in the coal industry. The policy effectively guaranteed supply by releasing new production capacity and increasing supply, and appropriately relaxing the policy of importing coal in the case of domestic coal resources shortage. The total capacity of coal mine construction projects approved and approved by the national development and Reform Commission and the National Energy Administration in 2019 is about 200 million tons. With the acceleration of the process of capacity compliance, China's coal capacity is expected to maintain a steady growth trend. It is expected that the power coal capacity will reach 3.97 billion tons in 2020, an increase of 200 million tons year-on-year, an increase of 5.31%. After entering 2020, with the gradual production of new capacity, the supply structure of power coal will continue to be optimized, and the output will continue to maintain a positive growth. However, considering the uncertainty of the production schedule of new capacity and the possible low utilization rate of capacity at the initial stage of production, it is expected that the national power coal output will increase to 2438 million tons in 2020, a year-on-year increase of 39 million tons, an increase of 1.63%.

In terms of coal import, the coal import volume of China has maintained a steady growth in recent three years. Mainly due to the supply side reform implemented since 2016, the domestic coal supply has declined sharply, the supply is limited while the downstream demand is still growing, the supply and demand pattern of the coal industry continues to be tense, and the complementary role of imported coal is more prominent. Since 2019, the output of domestic and imported coal has increased as a whole, and the supply is relatively sufficient, especially the number of imported coal has increased significantly. From January to September, the cumulative import of power coal reached 180 million tons, up 2.38% year on year. It is predicted that China's import of power coal will remain at a high level in 2020, with a year-on-year growth of 120 million tons, or 4.77%. The main reason is that the imported coal forms an effective supplement to the domestic coal market. In order to ensure the power demand and stabilize the market price of power coal, the policy of imported coal for direct power plants may incline. In terms of transportation, in order to ensure the demand for coal in the downstream, the railway department has taken a number of effective measures, actively strengthened the coal transportation organization, actively coordinated the coal production and demand enterprises to produce more coal and store more coal, increased the railway transportation volume of coal, improved the transportation efficiency of electric coal, and provided security for people's heating. In addition, in order to speed up the coordination of coal production, transportation and marketing system and increase the transportation volume, Jingshen railway, as the only transportation channel opened by Haoji railway at present, has established the goal of 10 trains of coal transportation volume per day in the later period, making every effort to ensure the coal transportation volume of Shaanxi and Haoji railway. In general, it is expected that China's railway coal transportation volume will continue to grow in 2020. The annual railway coal transportation volume will reach 2.81 billion tons, a year-on-year increase of 390 million tons, an increase of 16.11%. The railway coal transportation volume will account for 75% of the national coal production.