In October, the overall price of thermal coal showed a weak and stable trend, with poor release of actual demand from end-users and no positive factors boosting the market. The overall transaction price center shifted downwards, and the prices of various coal types all declined, generally adjusted to 10-30 RMB/ton. Except for a few regions with significant increases, which have driven the overall average price up, although the price of thermal coal has still fallen, the decline has significantly narrowed, and the overall performance has relatively stabilized. As of October 28th, the average price of thermal coal in the market was 714 RMB/ton, an increase of 3 RMB/ton from the beginning of the month. The monthly average price of thermal coal market this month is 714 RMB/ton, an increase of 14 RMB/ton or 2% compared to the previous month.
In terms of origin: The price of thermal coal remained stable with a moderate downward trend in October. At the beginning of the month, during the National Day holiday period, downstream coal mines were mainly observing and waiting due to sufficient pre holiday replenishment. The pace of transportation at the mine entrance slowed down, and the mine entrance quotation remained stable with weak operation. With the end of the National Day holiday, closed coal mines continued to resume production, and the overall coal mine
The supply of charcoal has slightly increased. Subsequently, the maintenance of the Daqin Line began, which had an impact on the external transportation of coal from some coal mines. However, the impact was limited, and the pattern of supply exceeding demand was difficult to change, with bearish sentiment dominating the market. In the middle of the month, downstream demand continued to be poor, coupled with a decline in the purchase prices of major port groups, leading to a greater drop in the price of mines. Private mines experienced a daily decline in prices due to poor sales, accumulated inventory, and accelerated price reductions. In the latter half of the year, the maintenance of the Daqin Line was completed, and coal transportation resumed normal. The main production area is affected by rainfall, and some open-pit coal mines have limited production, resulting in a slight tightening of output. Coupled with the sudden drop in weather in the north, there has been a slight release in civilian and heating demand, and the market mentality is gradually changing. The prices at the mine mouth have stopped falling and stabilized.
In terms of imported coal: The imported thermal coal market maintains a weak and stable trend, mainly affected by weak demand from Chinese and Indian buyers. The activity of the Indonesian thermal coal market has declined compared to the previous period, and transactions are relatively limited. As the weekend approaches, the upward momentum of the Indonesian thermal coal market is gradually weakening, and market prices remain stable. Among them, the price of low calorie coal is more obvious than that of medium and high calorie coal, and there are relatively more market inquiries.
In terms of ports: In October, port quotations were mostly deadlocked. With the continuous increase in ocean freight prices, the profit margins of traders were constantly squeezed, and their shipping enthusiasm was not high. Some traders had limited sources of goods and their quotations were relatively firm. This week, the import volume of coal in Beigang has once again increased, while the export volume continues to decline. The overall inventory is still rising, and the port has sufficient willingness to accumulate inventory. The daily average inventory of thermal coal storage is 25.0558 million tons, with a weekly increase of 737,100 tons and a decrease of 1.2567 million tons compared to the same period last year. Among them, the daily average inflow was 1.8692 million tons, with a weekly increase of 40,100 tons and a decrease of 133,900 tons compared to the same period last year; The daily average export volume was 1.6818 million tons, a decrease of 93,800 tons compared to the same period last year, and an increase of 132,300 tons compared to the same period last year.
In terms of demand: This week, due to the recent cooling effect, the daily consumption of southern power plants has increased, and the consumption of power coal storage has increased. The daily average power coal storage is 34.98 million tons, a decrease of 250,000 tons compared to last week and an increase of 200,000 tons compared to the same period last year. Entering November, the gradually arriving cold air has intensified the demand for electricity in terminal power plants. On the other hand, the large-scale opening of winter storage in power plants is expected to continue to drive up the demand for thermal coal in the market from the terminal.
Overall, the market for thermal coal prices remained stable and weak in October, with weak terminal demand and insufficient support for prices. Although there was a release of heating demand in the later period, it did not meet expectations and provided support but no boost to prices.
From a fundamental perspective, thermal coal is expected to experience multiple benefits on the demand side as winter approaches, driving coal prices to stabilize and recover; Although coking coal has performed poorly in the short term, causing a decrease in market confidence, there has been significant improvement in policy, and it is still expected to drive the overall recovery of coking coal in the future. On the surface of the secondary market, although the coal sector has performed poorly in the short term, its dividend characteristics still have advantages. With the gradual improvement of fundamentals, investors do not need to be overly pessimistic and still need to wait for market rotation opportunities in the future.
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