Recently, the spot price of thermal coal is still rising, but the trend of futures is tangled. In the later period, focus on the marginal changes on the supply side.

Mismatch between supply and demand

The coal mine accident caused concerns about production cuts. In the first quarter, coal production was significantly increased, with a cumulative output of 971 million tons of raw coal, a year-on-year increase of 16%. From January to February, the output of thermal coal was 513 million tons, a year-on-year increase of 27.3%. However, since April, safety inspections of major coal producing areas have been strictly enforced, coal pipe tickets have been tightened, and most coal mines have experienced production cuts and shutdowns. The shrinkage of coal mine supply has caused market concerns.

Imported coal is strictly controlled. In the first quarter, coal imports were sluggish, with 68.46 million tons of coal and lignite imported, a year-on-year decrease of 28.5%. Imports in March amounted to 27.33 million tons, a rebound from February and basically the same year-on-year.

Demand is stronger than expected. In the first quarter, my country's economy recovered strongly, and social power consumption rose sharply. In the first quarter, the total electricity consumption of the whole society was 1921.9 billion kWh, a year-on-year increase of 21.2%. Among them, the electricity consumption of the secondary industry was 1262.5 billion kilowatt-hours, an increase of 26.6% year-on-year, and the cumulative increase of household electricity consumption was 4.1% year-on-year, and with the warming temperature, there was a seasonal month-on-month decline. Therefore, the strong social electricity consumption was mainly accelerated by industry. Contribution to recovery. From the perspective of power generation, in the first quarter, the cumulative power generation was 1905.1 billion kWh, an increase of 19% year-on-year. Among them, the thermal power generation was 1,437.9 billion kilowatt-hours, an increase of 21.1% year-on-year. As the rainfall was significantly lower than in previous years, the substitution effect of hydropower was significantly reduced, with hydropower generating 195.9 billion kWh, an increase of 0.5% year-on-year. Therefore, the strong power generation in the first quarter was mainly contributed by thermal power. Thermal power accounted for 75.48% of the total power generation, significantly higher than 74.24% in the same period last year.

Thermal coal inventory fell to a low level. As of April 20, the total inventory of Qinhuangdao Port, Caofeidian Port and Jingtang Port was 9.856 million tons, a year-on-year decrease of 4.856 million tons, a decrease of 33%, and a decrease of 17.4% from the end of March. From the perspective of power plant inventory, as of the end of March, the coal inventory of key power plants was 50.91 million tons, a year-on-year drop of 23.69 million tons, a decrease of 32%, and a decrease of 22.7% from the end of February.

Supply is expected to increase

In the short term, the tight thermal coal supply is expected to ease marginally. On the one hand, the current coal price reaches the red warning zone, and the main policy will be to increase production, ensure supply and underprice. The safety supervision will not be one-size-fits-all. With high profits, coal mines have sufficient power to increase production. It is expected that the supply will slowly rebound in the later period. After the overhaul of the Daqin line in May, the railway traffic volume will also rise, which will ease the tight supply of thermal coal to a certain extent. On the other hand, the strong industrial growth rate in March and April may have a slight seasonal drop in May and June. However, the peak summer has not yet arrived, and the demand for thermal coal is likely to fall. At the same time, the seasonality of hydropower to thermal power Substitution will gradually emerge.

The price of thermal coal above 750 yuan/ton is obviously beyond the acceptable range of downstream power plants, and it can be expected that the regulation of coal prices is inevitable. The downward pressure on coal prices is increasing, and it is expected that the thermal coal price center will return to around 650 yuan/ton.