Power demand growth is expected to slow down, power coal growth is hard to last

The power coal contract rebounded continuously in May, but the short-term strength has not been reversed, but the current price difference has run to a historical high level in the same period, which will restrict the upward space of the period price. Affected by frequent safety accidents, coal enterprises in the production area stopped production ahead of time. At the same time, inventory of intermediate links and downstream enterprises was rapidly consumed, supply was tightened, and power coal futures rebounded strongly. However, the growth rate of power coal demand is expected to slow down, and the purchase pressure of power plants is not large. In the absence of demand coordination, the period price of power coal is difficult to get out of the independent strong market. In the first ten days of December, when the supply situation tightened, two coal mine safety accidents occurred in a row. The State Administration of coal mine safety carried out a three-month centralized rectification of coal mine safety production nationwide. In addition, the office of the work safety committee of the State Council and the emergency management department held a video conference to deploy and carry out special supervision of work safety.

16 supervision teams will be dispatched to carry out special supervision in many provinces across the country, and the work safety supervision efforts will be further upgraded. In order to ensure the goal of safety production task, the production intention of coal mines in the main production area is affected, resulting in production reduction and even early production suspension and vacation. At the same time, due to the constraints of winter climate factors, the coal export is blocked, coupled with the port quotation hanging upside down, the willingness of traders to store goods is reduced, and the port coal inventory is rapidly consumed. As of December 20, the total inventory of ports around the Bohai Sea in the North was 20.35 million tons, down more than 2 million tons on a month on month basis, down nearly 10%. The supply capacity of upstream and intermediate links declined, supporting the port quotation to stop the decline and recovery. The growth rate of electricity demand is expected to slow down. In November, the electricity consumption of the whole society will increase by 2.1% on a month on month basis, and the demand for electricity will be stable.

Specifically, the electricity consumption of the primary industry and the tertiary industry declined on a month on month basis, with only the electricity consumption of the secondary industry increasing by 6.19% on a month on month basis. The electricity consumption of the secondary industry contributed 55.35% to the growth of electricity consumption of the whole society in November, and increased by 4 percentage points on a month on month basis. Obviously, the secondary industry is the main driving force to support the continuous growth of electricity consumption in the whole society. However, from the perspective of historical data, January to February is the year's low demand for electricity in the secondary industry, and the contribution rate to the overall growth of electricity consumption even turns from positive to negative. As a result, the overall demand for electricity will decline. What's more, the 2020 Lunar New Year is slightly ahead of the past two years, which means that in January, enterprises will gradually expand the scope of production and holiday, and reduce the pressure on electricity consumption. According to the analysis of coal daily consumption data of six coastal power plants, the daily consumption of electric coal usually drops rapidly one week before the Spring Festival. It is expected that in the middle of January next year, the demand for electric coal will turn weak and the peak season will not be prosperous.

In addition, due to the influence of El Nino, the temperature in most areas of China is slightly higher than that of the previous year. In the next 20 days, this situation will continue, and the demand for heating electricity in theory will be lower than that of last year. The purchase of power plants is more cautious. Although the recent inventory of power plants has been significantly consumed, as of December 23, the coal inventory of six coastal power plants has dropped to 15.85 million tons, down more than one million tons compared with the beginning of the month, but the replenishment of power plants is not active. On the one hand, in the context of electricity marketization, the willingness of power enterprises to control costs upstream has been enhanced. In addition, although the current inventory level has consumption, it is far higher than the average level in recent years, and the available days of coal inventory can basically cover to the middle of January next year. On the other hand, the import restriction policy in January has been liberalized, and the coal that failed to pass the customs before will flow in rapidly, effectively supplementing the coal of southern power plant At the same time, it can reduce the supply pressure of northern port. In addition, the long-term cooperation quotation is stable, the power plant mainly implements the long-term cooperation contract, and the demand for market coal is limited. On the whole, the market coal price lacks the power to continue to rise. Combined with the analysis of futures market, the power coal contract rebounded continuously in May, but the short-term strength has not been reversed, but the current price difference has reached a historical high level in the same period, which will restrict the upward space of the period price.