Weak or improving quarter by quarter -- Prospect of power coal market strategy

Review and reflection in 2019: in 2019, the growth rate of the supply side is relatively constant, while the demand side is squeezed by three types of power sources: hydropower, wind power and thermal power, with negative consumption growth in the first half of the year; from the price trend in 2019, the first half of the year is more than 600, and the second half of the year shows a downward trend every quarter.

2020 Outlook: from the supply side, the industry supply is still in a moderate expansion stage. If the market coal price falls below the cost line of the enterprise, it will cause the enterprise to reduce production or stop the coal mine under construction; in terms of imported coal, the domestic coal price may continue to weaken, the price difference of imported coal may be narrowed, the competitiveness of imported coal is likely to decline, and it is difficult to significantly increase the amount of imported coal; from On the demand side, excluding the new energy generation, it is estimated that the thermal power generation increment will be 190 billion kwh in 2020, corresponding to the raw coal consumption of about 80 million tons, accounting for about 2.5% of the total power coal consumption.

Hot spot exploration: compared with the previous railway transportation time, the efficiency has improved a lot, and the national regional coal price transmission mechanism is smoother; the construction of inland main production area - Coastal ultra-high voltage has increased the purchased electricity in coastal provinces, and the coal consumption has been transferred from the coast to the mainland; according to the experience of the United Kingdom and the United States, the new electricity price policy is mainly to gradually return the decision-making power of electricity price to the market by the government The long-term development prospect of coal power industry will be favorable. The coal power price will accurately reflect the market supply and demand and coal cost, while the coal price is still mainly affected by its own industry supply and demand pattern.

Conclusion: in 2020, the overall growth rate of coal demand will be about 3.5%, which is close to the growth rate of production. However, the overall supply is still loose after the high inventory in 2019, but the degree of easing may be eased compared with 2019. It is estimated that the port coal price will fall about 5% in 2020, from 585 this year to 560-570 next year.