China Coal Association: current coal supply and demand is generally loose

Coal consumption has entered the peak season, and the market trend has attracted much attention. In response, Zhang Hong, Deputy Secretary General of China Coal Industry Association, said recently that China's coal supply and demand are generally loose, but it does not exclude the tension in the northeast, southwest, two lakes and one river at the peak. According to Zhang Hong, the coal market has achieved the basic balance of supply and demand by effectively resolving excess capacity in recent years. Advanced production capacity of some large mines has been released in succession this year. From January to October, China's raw coal output reached 3.06 billion tons, up 4.5% year on year. Coal imports reached 280 million tons, up 9.6% year on year. And the national coal consumption only increased by 0.8% year on year, so the supply and demand of coal is generally loose. " He said. He said that the coal output of Shanxi, Shaanxi and Inner Mongolia accounted for nearly 70% of the total coal output of the country, while the northeast, southwest, Hunan, Hubei, Jiangxi and other places inevitably experienced structural tension in some periods due to their low coal output.The national coal trade fair will be held in the winter of 2020. The annual power coal contract negotiation is in a critical period, and the coal price is still the focus of both parties' attention and game.

The coal medium and long-term contract system and the pricing mechanism of "base price + floating price" have become the ballast and stabilizer for the stable operation of the coal industry. " Zhang Hong said that more than 70% of this year's electricity and coal contracts are from China long term association, of which there are not a few three-year long term association contracts. The basic price is 535 CNY/ton. From the situation in the previous three quarters, the performance rate is more than 90%. Recently, 11 enterprises including state energy investment group, China Coal Energy Group and Datong Coal Mine Group jointly issued proposals, promising to stick to the medium and long-term contract pricing mechanism of "base price + floating price", strictly perform coal sales contracts, and further improve the medium and long-term contract fulfillment rate. The proposal also proposes to give priority to the allocation of resources in areas with tight traditional supply to ensure that the masses have sufficient coal for heating in winter; fully implement the national policies and measures to stabilize the market to ensure that the coal price remains in the green range.