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Thermal Coal News
SunSirs: Weak Fundamentals, Weak Operation of China Thermal Coal Market
September 09 2024 10:00:44SunSirs(Selena)

At present, the fundamentals of the thermal coal market are significantly weaker than the same period last year. As temperatures gradually decrease in the later period, the support of high daily consumption will also weaken. Coupled with the impact of poor economic conditions, non electricity demand is not optimistic. It is expected that in the short term, the thermal coal market will continue to operate steadily and weakly, with little upward trend.

In terms of imports, price difference of imported thermal coal,The minimum bidding price for importing Indonesian coal Q3800 power plant is 477 RMB/ton, which is 109.8 RMB/ton lower than domestic trade coal with the same calorific value in South China ports; The minimum bidding price for importing Indonesian coal Q4500 power plant is 649 RMB/ton, which is 46 RMB/ton lower than domestic trade coal with the same calorific value in South China ports. This week, the bidding price of imported coal for power plants in the South China region has steadily rebounded, but it still has significant advantages compared to domestic coal; Due to the gradual decrease in hydroelectric power generation in recent times, the load on power plants has increased, resulting in an increase in their procurement frequency and quantity.

In terms of origin, according to the tracking of mainstream coal mines (including Yushen, Fugu, Hengshan, Inner Mongolia), there are more than 10 coal mines with price changes. Today's price increase is mainly for seed and lump coal, with an increase of 10-15 RMB/ton. A small amount of washed coal has slightly increased by 5 RMB/ton. Metallurgical and chemical procurement has slightly fallen, and some civilian market procurement demand has slightly released, resulting in an increase in lump coal prices. Shenmu area: Some coal blocks in certain mines have seen a slight increase of 10-15 RMB, chemical seeds and face coal have seen a slight increase of 5-10 RMB/ton, some raw coal in certain mines have fluctuated by 10-11 RMB/ton, and individual double four mine seed coal has experienced a single drop of 20 RMB/ton; Fugu area: Coal prices in certain mining areas have decreased by 4-5 RMB, while lump coal prices have increased by 5 RMB/ton, with little price change; Individual large coal mines in Hengshan area have seen a rise of 10 RMB/ton, while the overall market remains stable; Yuyang area: There are basically no changes. Inner Mongolia region: Price changes are slowing down, with some large mining chemical coal falling by 7 RMB/ton and some raw coal slightly rising by 5 RMB/ton. Market trading activity is not high, and wait-and-see sentiment is increasing.

In terms of port, in this period, the large group's external purchase prices are linked by quantity and price, with low card prices and small increases at ports. The port inventory continues to decline to 21.6 million tons, and traders' shipments remain active, with prices tending to stabilize. Downstream purchases are mainly for essential needs, and the willingness to accept prices is not strong enough, resulting in overall fluctuations. The two ports of the Yangtze River are also in the process of destocking, and the atmosphere at the docks is average. Most of the quotations are higher, and the buying sentiment is slightly weaker. The available days of power plants continue to decrease, and inventory is also decreasing. The coal mine at Kengkou has experienced mixed ups and downs, and the overall market atmosphere still needs to be improved. In the future, more attention should be paid to the daily consumption of power plants, non electricity demand driven and winter storage expectations, changes in supply and demand relationships, and policies.

In summary, the recent thermal coal market has shown a complex and ever-changing trend in both supply and demand. On the supply side, domestic production is expected to gradually increase, while imported coal remains at a high level; On the demand side, stable macroeconomic development supports the growth of electricity consumption, but adjustments in the real estate market and energy-saving and carbon reduction actions may suppress coal demand in some industries. The actions of market participants indicate that there is a possibility of a rebound in coal prices in the short term, but in the long run, there is still uncertainty in the market supply and demand situation and price trends. It is necessary to closely monitor policy trends, weather changes, and industry demand changes.

 

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