Eight coking coal enterprises put forward initiatives to protect scarce resource

The medium and long term contract negotiation meeting of coal, steel and coke in 2020 was opened in Nanning, Guangxi on November 19. At the opening ceremony, Shanxi Coking Coal Group, Shandong energy group, Longmei group, Huaibei Mining Group, Jizhong energy group, China Pingmei Shenma Group, Kailuan Group and Shenmei group launched initiatives to be firm executors of the medium and long-term contract system and practitioners of deepening the supply side structural reform, to work together to build an upgraded version of coal, steel and coke industry chain cooperation, while protecting We will exploit and utilize scarce coking coal resources and accelerate the coking coal production and technological revolution. The initiative comes at the right time. Since the second half of this year, there have been periodic fluctuations in the coal market. Prices and profits in all links of the coal, steel and coke industry chain, including coal enterprises, have declined. There have also been voices questioning the benchmark price in society. Never forget the past, the teacher of the future. In the second half of 2016, the prices of international coking coal and domestic local market coal rose rapidly, and the prices of domestic coking coal main suppliers were rapidly differentiated. In order to ensure the stable operation of China's coal, steel and coke industry chain, on November 23, 2016, initiated by the national development and Reform Commission, China Coal Industry Association, China Iron and Steel Industry Association and China Railway Corporation jointly participated in the signing of the annual coking coal medium and long-term contract with locked volume price by six well-known domestic iron and steel enterprises. Since then, the medium and long-term contract has become the leading mode of cooperation between the supplier and demander of coking coal in China. From 2017 to 2018, the signing and strict implementation of the medium and long-term contract for coking coal in China, under the condition that the market price is much higher than the medium and long-term contract price, effectively guided the convergence and return of the price of coking coal in China from the CIF price of 308 US dollars / ton on November 23, 2016 to the medium and long-term contract price in China, and made a great contribution to the stability of the market, price and operation. In 2019, eight major coking coal enterprises in China's coking coal brand cluster signed annual medium and long-term contracts of 113 million tons, accounting for nearly 30% of annual sales of coking coal in China. The medium and long-term contract of Chinese coking coal can be said to be the ballast and stabilizer of global coking coal price. It is a Chinese scheme with common destiny of coal and Steel coking industry chain and industrial collaborative practice and innovation.

Integrity is reflected in the integrity performance of Chinese coking coal brand cluster enterprises. China's coking coal brand cluster enterprise represented by Shanxi Coking Coal Group is the main force of medium and long-term contracts of coking coal in China. In 2019, the medium and long-term contracts accounted for more than 75% of its own resources, and the contract fulfillment rate in the first 10 months of this year exceeded 95%. Integrity is reflected in the increasing viscosity of customers to Chinese coking coal brand cluster enterprises. According to the survey of relevant departments, the purchasing intention index of Chinese coking coal brand cluster enterprises is generally higher than the market prosperity index; the customer density is at a historical high level, and shows a trend of gradually increasing, which reflects the increasing dependence of customers on Chinese coking coal brand cluster and the improvement of brand loyalty. Integrity is reflected in the standardized operation and provision of the data source of the central price Xinhua Shanxi coking coal price index. The annual trading volume of the trading platform reaches 160 million tons. The stability is reflected in product quality, price and transportation guarantee. From the second half of 2018 to this year, the medium and long-term contract price is generally kept in a reasonable range. Under the condition of the sharp rise in China's steel price, China's coking coal brand cluster enterprises have maintained their strategic focus, effectively guiding and influencing the local coal and imported coal to maintain a relatively stable state. In the first 10 months of this year, due to weak international market demand, China's iron and steel production increased significantly, coking coal imports increased more, and some downstream enterprises proposed to reduce the benchmark price of medium and long-term contracts. The original intention of user enterprises to reduce costs and increase efficiency is understandable, but the benchmark price cannot be changed at will. The benchmark price is neither the highest market price nor the lowest market price. We can't just look at the present and ignore the long term. In addition, thanks to the implementation of the policy of "public to railway transfer", the sales volume of railway coal of China's coking coal brand cluster enterprises has steadily increased, and the outsourcing volume of coking coal of some customers has fully realized railway transportation.

Collaboration is embodied in trade collaboration, technology collaboration and cultural collaboration. The successful holding of the medium and long term contract negotiation meeting of coal and steel coke in Chengdu and Nanning has realized the centralized ordering of Chinese coking coal enterprises, including Chinese coking coal brand cluster enterprises, and created the basic conditions for integrating resource varieties, unifying standards and standardizing services. The coal blending technology exchange among brand cluster enterprises can better provide customized services and personalized solutions for customers, and enable all parties in the industry chain to have a more comprehensive understanding of China's coking coal and protect China's coking coal. In terms of cultural coordination, it is a common sense of community of common destiny to advocate the coal, steel and coke industry chain. The upstream industry should support the downstream industry to extend the boom cycle, and the downstream industry should also plant the soil for the upstream industry to recuperate, support the upstream industry to accumulate the resource base, and oppose the exhaustion of water and fishing. Coking coal is an important raw material of iron and steel industry. Coking coal accounts for less than 10% of the world's coal reserves. Coking coal accounts for 26.63% of the proven coal reserves in China, which is higher than the world average, but is still relatively limited, in which strong cohesive coking coal and fat coal account for only about 36% of the total coking coal reserves. In recent years, due to the lack of awareness and practice of its scarcity, coking coal accounts for about 35% of the total annual coal mining in China, the mining intensity is too large, and high-quality coking coal is over developed, which is particularly prominent in small and medium-sized coking coal production enterprises, coking coal protective exploitation is very urgent.