China Coal Association: downward pressure of coal economy tends to increase

On December 6, the China Coal Association released data showing that since 2019, the release of coal production capacity has accelerated, the growth of consumption has slowed down, and the price of coal has declined steadily. From January to September, the total profits of Coal Enterprises above designated size decreased by 3.2% year on year, and the cyclical growth momentum of coal economy was obviously weakened. Especially since October, the market price of power coal around Bohai Sea has dropped significantly, and the current market coal price has been inversely linked with the annual long-term cooperative price; the coal storage of the national unified dispatching power plant has reached a record high, with a month on month increase of more than 10 million tons. According to the China Coal Association, with the continuous release of new coal production capacity and the continuous improvement of new energy development level, the coal supply will further shift to a loose direction, and the downward pressure of coal economy will increase.

Data show that coal price is in a reasonable range this year, and it has declined steadily since the beginning of the year. In terms of the medium and long-term contract price, the medium and long-term contract price of power coal (5500 kcal of water coal) has always been stable in the green range, with an average price of 556.2 CNY/ton from January to November, a year-on-year decrease of 2.6 CNY/ton, including 553 CNY/ton in October, a month on month decrease of 1 CNY/ton. The market price decreased month on month. Since this year, the average market price of 5500 kcal coal has been 599.7 CNY/ton, down 59.8 CNY/ton year on year, 53.6 CNY/ton year on year. As of November 25, the market coal price was 549 CNY/ton, a year-on-year decrease of 87 CNY/ton and a month on month decrease of 21 CNY/ton. In this context, the business situation of enterprises continues to improve. In the first nine months, the operating revenue of Coal Enterprises above designated size was 1.83 trillion yuan, up 3.9% year-on-year; the net amount of notes receivable and accounts receivable was 364.17 billion yuan, down 6.3% year-on-year; the asset liability ratio was 64.7% (including 70.7% of large coal enterprises), down 1.1% year-on-year; the total profit was 216.5 billion yuan, down 3.2% year-on-year, down 2.1% higher than that of Enterprises above Designated Size nationwide.

According to the statistics of Coal Association, the total profit of 90 large coal enterprises in the first nine months (including non coal) was 124.47 billion yuan, up 3.8% year on year. According to the China Coal Association, we need to further consolidate the results of supply side structural reform, and continue to adhere to and improve a series of systems such as capacity reduction and replacement, peak shaving and emergency capacity reserve, medium and long-term contract and pricing mechanism of "base price + floating price", minimum and maximum inventory, suppressing abnormal price fluctuations and enterprise credit evaluation, so as to ensure that coal prices remain in the green range. We will comprehensively implement national policies and measures to stabilize the market, pay close attention to the impact of changes in macroeconomic development at home and abroad on the supply and demand of the coal market, organize production according to market changes, guarantee supply, timely adjust the flow of resources, and ensure the stable operation of the market.