On Monday (February 22), Qingang's 5500 kcal thermal coal offer continued to decline, the lowest has dropped to 595 yuan / ton, once again fell below the red range. The current thermal coal quotations have been cut in half, and futures prices have also oscillated lower in the case of weak spot prices, and the current price difference has once again shrunk to single digits. After the holiday, the supply and demand of thermal coal will both rise, and it will still be difficult for thermal coal to replicate the previous trend.

The increase in the pit mouth still exists

During the Spring Festival, the supply intensity fell rapidly. Data show that the total output of sample coal mines in Shanxi, Shaanxi, and Mongolia was 24.75 million tons, while the capacity utilization rate was 75.2%, which were 8.9 percentage points and 7.3 percentage points lower than the previous week. Although affected by the epidemic, the state encourages the celebration of the New Year in situ, but except for the normal production of some large and medium-sized coal mines, most small private mines either suspend production or reduce production, actively reducing supply. However, during the same period, downstream users also reduced their purchases, leading to the continuous accumulation of inventory in the pitheads and shipping stations of some coal mines, and even some coal mines have top warehouses. Oversupply puts huge downward pressure on pithead prices. The average price of thermal coal in the Wuhai area of Inner Mongolia is 463 yuan/ton, down 61 yuan/ton from before the holiday, which is 11.64%. However, with the further advancement of the resumption of coal mine work and production, there is still a large increase in the pit mouth, and there is still a large room for price reductions in coal prices.

Port fast storage

After the holiday, the northern port quickly accumulated storage to above 20 million tons, showing a state of high inventory. Among them, Qinhuangdao Port increased by an average of 50,000 to 80,000 tons per day. As of February 22, the inventory was as high as 5.710 million tons. The low rose by 850,000 tons. On the one hand, due to the impact of the supply guarantee policy, coal mines are operating at full capacity, while the Daqin Railway is operating at full capacity, and the port transfer volume remains at a high level; on the other hand, the temperature in most parts of the country has rebounded significantly recently, which has promoted the use of coal and electricity in winter The peak quickly receded, and the demand for electricity and coal consumption and purchasing further shrank. Therefore, in the case of increasing supply and weakening demand, the northern port's inventory quickly accumulates. However, there are still some differences in port inventory in various places. As of February 19, the total inventory of the Yangtze River estuary was 2.8 million tons, a week-on-week increase of 1.050 million tons, which is still relatively low. At present, the overall inventory is picking up rapidly. After the society resumes work and production, sufficient port inventory can play a good role in cushioning and avoid large fluctuations in coal prices.

Downstream procurement slows down

Data shows that during the Spring Festival, the national average daily power generation was 15.34 billion kWh, and the lunar calendar year-on-year growth rate was 1.7%, which was significantly lower than expected. In the case of low downstream consumption, power plants tend to maintain the long-term cooperative rigid replenishment, and the willingness to purchase coal in the market declines. However, despite the decrease in coal purchases in the market, the accumulated coal inventory is not affected. The inventory of power plants in many places has increased to a mid-to-high level. Among them, the increase in the inventory of power plants in East China and Central China is particularly prominent. Under the conditions of low downstream consumption and medium-to-high inventory, there is still room for a decline in thermal coal.

On the whole, coal mines in thermal coal producing areas are gradually resuming work and production, and supply is increasing, while downstream power plants maintain low daily consumption, and power plant inventories are slowly accumulating. Although the port inventory in some regions is low, the accumulation rate is relatively fast, and it is expected to return to normal levels soon. After the holiday, the social resumption of work and production is progressing in an orderly manner, and social power consumption will rebound rapidly. However, with the coexistence of high pit supply and high inventory at ports, the price of thermal coal will gradually return to a reasonable range.