Why is the coal price not falling when the off-season is coming?

In January, despite the low supply and demand in the coastal coal market, there are still sporadic transactions between some small and medium-sized users and coal traders; in addition, the high-quality coal in the port around the Bohai Sea remained tense, which promoted the emergence of cargo phenomenon such as ships, and the port coal price kept rising slightly, and then stabilized. Data shows that in the first and middle of January, the price of power coal in the 5500 kcal market of the port around Bohai Sea has increased by 5 CNY/ton, and the price of power coal in the 5000 kcal market has increased by 7 CNY/ton.

The main reasons for this phenomenon are as follows: first, the import of coal has not been fully liberalized. It was originally thought that in January, a large number of imported coal poured in; however, in fact, the General Administration of Customs did not officially issue the 2020 import coal clearance plan, only for some of the imported coal that has been waiting in line for a long time to be released, while many ports in the south do not accept the customs declaration of traders temporarily, and the imported coal has not yet entered the domestic market in a large scale.

Second, upstream shipment is affected. Shanxi, Inner Mongolia and other places suffered from heavy snow, limited transportation. But near the annual pass, there are many coal mines closed down for holidays; in addition, the coal mines in Shanxi and other places increased security inspection, and the external transportation volume was affected, and the daily average transportation volume of Daqin line dropped to 1 million tons.

Third, the cold air came, and the civil power load increased. In January, in cold winter, the daily consumption of power plants kept at a medium and high level; until January 13, the daily consumption of six coastal power plants dropped below 700000 tons, and on January 19, the daily consumption of six coastal power plants dropped below 650000 tons.

Fourth, when the previous year was approaching the annual pass, traders actively cleaned up inventory, collected funds, and launched price reduction sales, but this year there was no such phenomenon. Near the Spring Festival, there is little high-quality coal left in the Bohai Sea port, and the subsequent transfer in is reduced; at this time, there is also a small amount of demand in the downstream, high-quality low sulfur coal is still very tight, which supports the coal price of the port to remain strong.

At present, the coal market in the production area is running smoothly. Near the Spring Festival, the coal mines in the main production area at the supply end will be shut down for holidays in succession. Among them, the private coal mines have basically stopped production and had holidays for 15-20 days; the state-owned coal mines have stopped production and had holidays for about 3-10 days, and this year's time is less than last year's. In terms of demand, with the approaching of Spring Festival, downstream plants have been shut down in succession, and the power load has fallen down; in particular, the daily consumption of a power plant in Jiangsu and Zhejiang has declined significantly, and the enthusiasm of downstream users for hauling has weakened, and it is expected that the two weak patterns of coastal power coal supply and demand will continue to the Spring Festival.