Power plant coal consumption load maintains high power coal price

Although it is in the peak season of winter heating, the weakness of power coal still continues this year. In the context of the recent rise in most futures commodity prices, on December 10, the main power coal contracts continued to decline again, with the day's closing at 546.2 CNY/ton, down 0.22%, about 7.5% lower than the stage high of 590 CNY/ton at the beginning of September. The fluctuation of future price is closely related to the spot market. "Since December 6, the demand for medium and low calorie power coal in the northern port has weakened, and the price has fallen slightly, among which the quotation of 5000 large calorie coal traders has dropped to around 485-490 CNY/ton." Jing Wenjuan, an analyst with Zhuo Chuang power coal, pointed out that under the influence of seasonal factors, the coal consumption load of the power plant remained at a high level, but because the inventory of downstream users was still at a high level, and the supply of imported coal was sufficient in the later stage, the demand was limited, and the coal price and freight rate kept a narrow fluctuation. During the national coal trade conference, the coastal power coal market kept stable operation as a whole.

After the conference ended on December 6, the quotation of traders began to loosen. At the same time, large coal enterprises carried out underground adjustment of the new annual and monthly long-term coal prices by different ranges, which made the spot market bear downward pressure. As of December 9, the main closing price of 5500 kcal power coal in Qinhuangdao port was 545-55 0 CNY/ton, 2.5 CNY/ton lower than that at the beginning of the month. The price of power coal remains low, which leads to the continuous cost inversion of power coal delivery in northern ports. According to the Taiyuan coal trading center, according to the estimation of Fenwei energy's production area on December 6, the costs of transporting the power coal (cv5500) in the "three West" area to the northern port for closing are respectively: 575 yuan for Shanxi coal, 571 yuan for Mongolian coal, 575 yuan for Shaanxi coal, 548 yuan for cci5500 index on December 6, and 27 yuan for upside down. The average level of shipment hanging upside down is 1 yuan higher than that of the previous day. In this case, the enthusiasm of traders for shipment is constantly weakened, and some small and medium-sized traders even withdraw from the train. According to the statistics of the transportation volume of the Inner Mongolia coal trading center, since this year, the highest weekly transportation volume of the bureau is 1.94 million tons in January, the average weekly transportation volume up to now after the Spring Festival is 1.59 million tons, while the average weekly transportation volume after the Spring Festival in 2018 is 1.87 million tons, far higher than the average level in 2019, and the highest weekly transportation volume in 2018 is 2.19 million tons. With the continuation of the upside down situation, the weekly transportation level has recently dropped to a low level of about 1.45 million tons.

In addition to traders, coal mines will also lose money in shipping to ports because of transportation costs. Data from Inner Mongolia coal trading center shows that since this year, small and medium-sized shippers have to withdraw from the train due to long-term losses under the situation of continuous reverse shipment. As a result, at present, the main shippers of Huju are direct coal mine owners, and the proportion of intermediate traders has declined significantly. We can also see some clues from the traffic volume data of the Datong Qinhuangdao line. From January to October 2019, the total freight volume of Daqin line is 36.12 million tons, a year-on-year decrease of 3.75%. In terms of the total transportation volume in September and October, the total transportation volume in the two months of this year is 70.47 million tons, which is still 2.8% lower than the same period last year after excluding the impact of overhaul. The low price of power coal in the peak season does not mean the weak market demand. Jingwenjuan said that after December, the daily consumption of six coastal power plants continued to be at a high level of more than 700000 tons, and the available days of inventory dropped to around 22 days. Strong demand can also be seen from coastal freight rates. As of December 9, China's coastal coal price index closed at 903.45, up 2.71, or 0.3%, compared with the previous period; 47.94, or 5.6%, compared with the same period last week; 241.51, or 36.49%, compared with the same period last year.

It is reported that the rebound in freight rates is mainly due to the nationwide wide cooling, the daily consumption of six coastal power plants continues to be at a high level of more than 700000 tons, and the demand for coal consumption rebounds seasonally. Affected by the limitation of imported coal and the price reduction of the long-term cooperation of large coal enterprises in December, most end-users continue to shift the purchase of electric coal to the long-term cooperation, resulting in a slightly tight transportation capacity compared with that in late November. In addition, freight fluctuation is also affected by frequent closure of northern ports due to fog. "Considering that the new Changxie coal and imported coal are about to flow in January, the power plant is mainly de stocking at present, and the enthusiasm for purchasing electric coal is still weak, which will suppress the market coal price from the demand side. On the supply side, some coal mines in the main production area of Shanxi, Shaanxi and Inner Mongolia have suspended production due to factors such as safety inspection and working face moving. At the same time, the coal price at the mine mouth continues to maintain a high level, forming a small support for the port coal price. In a word, in the short term, the port power coal market will mainly fluctuate slightly, and the possibility of sharp rise or fall is small. " Jingwenjuan believes that at present, the daily consumption of six coastal power plants continues to operate at about 750000 tons, and the inventory drops to around 16.5 million tons. The available days of coal storage are still about 22 days safe, and the demand for replenishment of downstream storage has not been released. At the same time, the impact of the superimposed seal was eliminated, the coastal coal transportation recovered smoothly, and the demand side was in a strong wait-and-see mood. At the beginning of the week, both sides of the market made tentative offers, and the actual transaction was limited. In the later stage, even though the daily consumption of coastal power plants has further increased, under the constraints of high inventory, the coastal coal market is unlikely to turn better, and the freight rate and coal price will continue to maintain a narrow range of fluctuations.