Basic determination of benchmark price reduction for long term cooperation

Near the end of the year, due to the frequent safety accidents in the near future, the upgrading of import restrictions, and the coming winter heating demand peak season, the market has strong psychological support. However, the supply of the production area is stable, the port coal inventory is high, and under the background of power market, the power plant is more cautious in the purchase of domestic trade coal, and the market supply is not tight. In November, the medium-term supply was stable, and the imported coal market surged again. Jiangsu Port stops berthing imported coal; Guangdong Shantou customs stops customs declaration in other places, and only local integrated customs declaration is allowed in the future; it is more difficult for Jingtang Port to pass customs and unload. In addition, some ports in Hainan, Guangxi, Fuzhou and Northeast China have not been cleared before, and import restrictions have been significantly upgraded. The role of foreign trade coal supplement has declined, and downstream enterprises will have to increase the purchase of domestic trade coal.

At the same time, there are major coal mine safety accidents in Shanxi area, the safety supervision will be further tightened, and the market supply instability will be enhanced. But supply stability is hard to change. The import restriction is less than one and a half months. At present, most of the power plants have completed the import procurement work, and will quickly pass the Customs at the beginning of 2020. The import restriction does not affect the medium-term supply. From the perspective of domestic production capacity, according to the data from the National Bureau of statistics, the output of raw coal in September October was stable at over 320 million tons, and the output of raw coal continued to be released. November December is usually the peak season of raw coal production, which can basically cover the demand growth. Since November, the daily consumption of coal in six coastal power plants has been about 600000 tons, which is higher than the same period last year, but basically equal to the average value in recent years, and the pressure on power plant procurement is not great. However, the North has officially entered the heating season. Once a large area of cooling in the south, the demand for heating electricity will increase rapidly. At present, the available days of inventory are less than one month. Once the daily consumption level rises, the inventory will be difficult to cover the demand to the end of December.

In the later stage, the purchasing power of electric power enterprises may be increased. On the other hand, as of November 10, the coal inventory of national key power plants was 97.92 million tons, which was at a historical high level in recent years, higher than 6 million tons on a year-on-year basis, so the urgency of replenishment was not strong. In addition, the medium and long-term supply is loose, and the market is pessimistic about the price trend. In the case of buying up and not buying down, the purchase of power plants is more cautious. At present, it is mainly to implement long-term contracts, and the actual boost of demand side is limited. The price of long-term cooperation is expected to be lowered this month. The annual and monthly quotation of long-term cooperation published by Shenhua Group has been lowered to a certain extent, with an average price of about 560 CNY/ton, which has a strong indicative effect on the market.

At the same time, since November, the cci5500 kcal power coal price index, Bohai power coal price index and cctd price index published by Fenwei energy have also declined significantly compared with the end of last month. If not surprisingly, the long-term cooperative price will continue to decline in December. The fourth quarter is the negotiation period of the new year's long-term benchmark price, which has a great impact on the procurement cost of medium and long-term coal and power enterprises. The market expects that the benchmark price will be lowered. On the one hand, electric power enterprises did not enjoy the results of tax reform and profit transfer in 2019. Before that, some electric power enterprises have reported to the state their demands for reducing the benchmark price of the long-term cooperation. On the other hand, the market-oriented transaction of electric power has become a future development trend. In 2020, the price of electricity will not rise temporarily, while the price of general industry and Commerce will only fall or not rise. The intention of lowering the price is very obvious. In order to improve the operation of coal power enterprises, upstream coal The benchmark price of CFA was basically determined.