Shortage of power coal supply affected by epidemic situation in short term

During the Spring Festival, the outbreak of pneumonia caused by a new coronavirus had a great impact on the production and transportation of steam coal. In the first day of February 3rd, the performance of steam coal futures was strong, and the main contract rose to 580 CNY/ton in the 2005 session, closing at 557.2 CNY/ton. Before the short-term spot tightening, traders took the initiative to go to the warehouse, the port inventory continued to decline, and during the holiday period, the transfer in volume of Beigang decreased, and the inventory further decreased. As of February 5, the inventory of Caofeidian port is 3.298 million tons, and that of Qinhuangdao port is 4.2 million tons, both of which are in a low historical position. At the same time, due to the impact of the epidemic, local governments have introduced policies to delay the resumption of work, and the affected production capacity accounts for about 50% of the power coal supply.

There are a few coal mines in Inner Mongolia, and Yulin and other places in Shaanxi take the important responsibility of national energy security and supply. At present, about 40% of Yulin's resumption of work is producing about 130 million tons. In terms of transportation, highway transportation has basically stopped. At present, railway platform shipping is the main mode, but the platform inventory is not sufficient. If the supply continues to be limited, it may only be enough to maintain the shipment for several days, which has a great impact on the power plants that have not signed the direct long-term cooperative coal. At present, the domestic power plants and Huadian inland power plants also raise the purchase price of market coal to varying degrees. The current spot price of low sulfur coal (cv5500, s0.6) is 565-570 CNY/ton. The imported coal is tight, the cci5500 import price index is 522.8 CNY/ton, up 6 CNY/ton compared with the previous period, and the price difference is reduced to 47.2 CNY/ton. Generally speaking, the sudden epidemic situation disrupted the flow of domestic power coal as a whole, and the shortage of spot resources supported the rise of short-term coal prices. The epidemic affects the long-term demand and the demand side. From the perspective of the six coastal power plants, the daily consumption continued to decline due to the delay in the resumption of industrial enterprises.

As of February 6, the daily consumption dropped to 370400 tons, and the inventory rose to 15963400 tons, with 43.1 days available. It is understood that the willingness of the six power plants to purchase market coal at a high price is not strong. In the short term, after the downstream enterprises return to work intensively, the demand for power coal will appear intensively. At the same time, because the power coal storage is in a low position in history, and the production and transportation are not smooth, it will form a time window of spot shortage. In the long run, the impact of the epidemic on the demand side may not be limited to the recent shutdown. For example, some downstream products are affected by the limited transportation, and the finished products are accumulated. At the same time, the price of the products affected by the crude oil is under pressure, and it may take a long time to digest. The delayed resumption of work also has an impact on the capital and inventory turnover of many industrial enterprises, thus affecting the overall power consumption growth.

Therefore, affected by the epidemic situation, the demand for power coal may further weaken. In response to the epidemic situation, the comprehensive Department of the National Energy Administration issued the notice on coal supply guarantee during the epidemic prevention and control period, emphasizing the role of coal as ballast in energy security, which has certain guiding significance for the production and demand connection of coal and specific matters such as price. For example, the private power plant of Weiqiao group, under the coordination of the leading group of epidemic situation disposal in Shandong Province, docked with Yankuang's supply. The coordination of supply and demand will, to a certain extent, suppress the large fluctuation of the price of power coal. In addition, after the supply side reform, China's coal production capacity has been significantly optimized. The production capacity of over 10 million tons of super large coal mines is about 90000 tons, accounting for about 20%, and the production capacity of 1-5 million tons is about 1.9 billion tons, accounting for about 40%. At present, the output of coal has rebounded more than expected. It can be seen that after the concentration and optimization of production capacity, the output elasticity and supply guarantee capacity have been strengthened. In short, affected by the epidemic in the short term, the supply and demand are mismatched, the supply gap of the spot market of power coal is obvious, and the overall spot price is strong, which drives the futures price to rise sharply. However, in the long run, the loose supply situation has not been reversed, and according to the 2018-2020 freight incremental action plan, with the improvement of transportation capacity of Tanghu line, vari line and the opening of Haoji railway, the growth of railway transportation capacity will be accelerated in 2020, and the power coal circulation capacity will be further improved. In terms of operation, it is not recommended to catch up.