After the power coal falls below the long-term co price, can the market rebound

Since March 2019, the power plant inventory is high, and the influence of factors such as transportation capacity improvement, environmental protection and safety after capacity optimization is weakened, the power coal futures and spot prices show a downward trend. After falling below the long-term co price, it started a wave of rebound market. However, I doubt the sustainability of the rebound. Since the daily consumption of the power plant fell into winter, the loading and unloading efficiency of the northern port decreased, and the inventory decreased accordingly. Taking Qinhuangdao port as an example, the maximum is 7.2 million tons in mid October 2019, while only 4.58 million tons remain on January 13, 2020. Inventory has declined, and coal mines have been shut down before the Spring Festival, so supply is tight. Downstream plant inventory also declined. As of January 13, the total power coal storage of six power generation groups is 14862500 tons, with 21.55 days available. However, the enthusiasm of the power plant to replenish the storage is not high, and the long-term contract is the main reason.

The main reason is that the daily coal consumption of the power plant has shrunk to 689600 tons due to the impact of the shutdown of industrial enterprises before the warm winter and Spring Festival, and the demand for coal is relatively weak. After the increase of production growth rate in 2018, China has ended the stage of total capacity reduction. In 2019, while the capacity was 100 million tons, the advanced capacity was also released. From January to October 2019, the newly increased monthly production capacity reviewed by the national development and Reform Commission and the Energy Bureau was 210 million tons. In terms of production, in 2019, the output of raw coal is expected to be 3.8-3.9 billion tons, with a growth rate of about 4.6%. If the newly built capacity is completed in the early stage and the capacity is put into operation quickly, the total domestic capacity will be 3.923 billion tons and 4.072 billion tons respectively in 2020 and 2021. With the gradual release of high-quality production capacity, the coal market pattern is bound to further ease. In terms of power coal alone, the output in 2019 has increased significantly. From January to October, the output is 2.56 billion tons, a year-on-year increase of 6.25%. Compared with the output of 2.96 billion tons in 2018, the growth rate in 2019 is expected to be 5%, higher than 3% in 2018. Railway transportation capacity will further improve due to regional differences in production and consumption, and transportation costs have a more obvious impact on coal prices.

According to the action plan for freight increment in 2018-2020 formulated by China Railway Corporation, by 2020, China's railway coal transportation volume will account for 75% of the total output, corresponding to 2.81 billion tons. In 2019, the growth rate of railway transportation slowed down. From January to October, China's railway coal shipment volume was 2.032 billion tons, an increase of 3.2% year on year. It is expected that the annual shipment volume will be 2.45 billion tons. The transportation capacity of Tanghu line and vari line will be improved, and Haoji railway will be opened. In 2020, the railway transportation capacity will be further developed, and the power coal flow capacity will also be improved. The proportion of thermal power generation decreased in 2019, and the growth rate of the whole society's electricity consumption was 5.1%. According to this growth rate, the whole society's electricity consumption will increase to 76000 billion kwh in 2020. However, in terms of thermal power, affected by the target of non fossil energy consumption of 15% and 20% respectively in 2020 and 2030 proposed in the 13th five year plan, the proportion of thermal power generation and installed capacity in China has decreased year by year, and the proportion of thermal power generation in the total national power generation has decreased from 81.3% in 2011 to 71.6% in January October 2019.

According to the development of the chemical industry, the growth rate of electricity consumption is expected to be 7%, and the corresponding consumption of coal is 300 million tons; the consumption of coal for civil use and other aspects may continue to shrink. The year 2020 is the end of the 13th five year plan. The coal strategic planning institute said that the key goal of the 14th five year plan is to improve the degree of marketization, and the policy needs to return to rationality. In order to achieve endogenous development, the coal industry should strengthen its compliance with market regulations, solve the problem of insufficient production capacity, and then strengthen the stock competition with the help of market competition, so as to force production Can optimize spontaneously. Since 2020, the market mechanism of "benchmark price + fluctuation" has replaced the coal electricity price linkage mechanism, fully reflecting the hope of the state to coordinate the transmission channels of electricity coal and coal electricity, electricity price and upstream and downstream price markets with the market price mechanism.