The price of power coal is unable to rise due to high inventory in all links

Now it has entered the peak season of traditional power coal demand, and the daily consumption of power plants has performed well. However, since the fourth quarter of this year, the price of power coal has been declining. The reason is that the high inventory of each link cannot be ignored. This paper will mainly review the operation of coal inventory of each link in China this year. According to the past years, the consumption of power coal has obvious weak and peak season changes, and usually reaches the highest point in the fourth quarter of a year; however, in recent two years, the seasonal change of power coal consumption is weakening. In terms of inventory, the average inventory level of the upstream, middle and downstream of this year is higher than that of last year. As a whole, the inventory of national key coal mines increased year on year.

As of October, the inventory of national key coal mines was 28.998 million tons, an increase of 7.956 million tons, an increase of 37.81%; the average inventory of the first 10 months was 25.7108 million tons, an increase of 663700 tons, an increase of 2.65%. It can be seen from the figure above that the fluctuation range of national key coal mine inventory has narrowed overall this year, with a sharp drop only in February. In February this year, the national key coal mine inventory was 1991.385 million tons, a decrease of 1.1282 million tons on a month on month basis, a decrease of 1.8857 million tons on a year-on-year basis. The significant change in the inventory was mainly due to the lower than expected impact of the mine mouth production resumption after the year. Since then, with the continuous release of optimized production capacity, the overall coal mine inventory has increased steadily. In the fourth quarter, the average inventory of mainstream ports rose in northern ports. As of December 12, the inventory of Qinhuangdao port was 5.95 million tons, and the average inventory in 2019 was 6.0777 million tons, a year-on-year decrease of 61400 tons. Compared with last year, the inventory of Qinhuangdao port has decreased slightly, but since the fourth quarter of this year, Qinhuangdao port has been mainly controlled by long-term cooperation, with a significant increase in coal inventory.

In the fourth quarter, the average coal inventory of Qinhuangdao port was 6.5203 million tons, a significant increase of 562500 tons, or 9.44%, compared with the average inventory of 5.9578 million tons in the first three quarters. As a whole, the process of de stocking downstream power plants has accelerated. Since 2018, the six coastal power plants have adopted the strategy of high inventory, and the power coal inventory has always been in high shock operation. Up to now, the inventory of six coastal power plants has reached 16.4551 million tons, with an average annual inventory of 16.3734 million tons, an increase of 22.373 million tons over the previous year, an increase of 15.83%. Since the fourth quarter, under the guarantee of imported coal and sufficient long-term coal, the power coal inventory has been high. At the same time, the daily consumption of the power plant has been running at a low level from October to November, and the digestion speed of the inventory has decreased. In December, duyen Hai power plant actively took the initiative to inventory, only to maintain just need to replenish, inventory fell. In the fourth quarter, the average inventory of six coastal power plants was 16.4628 million tons, an increase of 113500 tons over the previous three quarters. From the three links of the upstream, middle and downstream, under the main tone of speeding up the pace of capacity optimization this year, the domestic upstream and downstream coal stocks have increased compared with last year; in the later stage, at the end of recent years, some coal mines in the supply sector have started to cut production and stop production because they are close to completing the production tasks; in the demand sector, the downstream inventory is at a safe level, and some users are reducing the haulage, waiting for the haulage next year Changxie coal or imported coal, so it is expected that the coal price will continue to be weak in the later period.