In 2024, the global economy is gradually moving towards a new equilibrium state, and the global changes are driving the accelerated evolution of the energy market. In this context, the thermal coal market is showing a trend of initially high and then low, with gradually narrowing upward and downward space. The annual coal production shows a trend of initially low and then high, but the long-term high inventory levels in the middle and lower reaches have resulted in unclear seasonal characteristics of thermal coal, and overall supply and demand stability is relatively high. The market price of full power coal is showing a downward trend.
Market characteristics:
The thermal coal market presents the characteristics of "not prosperous during peak season and not weak during off-season". This is mainly due to the sustained growth of coal production and imports, as well as the long-term high inventory levels in the middle and lower reaches.
The high level of port inventory is putting pressure on coal prices. But coal companies have strong profit sustainability and may have a comparative advantage in cash flow after undergoing balance sheet optimization.
Supply situation
Domestic supply:
The coal production in Xinjiang, Inner Mongolia, and Shaanxi regions continues to increase, becoming the main growth point for the supply of thermal coal. Especially in Xinjiang, the production of raw coal has significantly increased, making it one of the important coal producing areas in China.
Affected by the "three excesses" and the special rectification of hidden working faces, the coal production in Shanxi region was once restricted, but it was effectively supplemented in the later stage, and the overall production gradually recovered.
The pressure of safety supervision in the main production areas is gradually easing, and coal production is gradually recovering and increasing. The steady advancement of intelligent mining projects has improved the production efficiency of coal mines.
Import supply:
According to the import and export data of China's thermal coal in 2024, the national coal import volume reached 490 million tons from January to November 2024, a year-on-year increase of 14.8%, setting a historical record. Among them, the import volume of thermal coal was 175 million tons, an increase of 13% year-on-year; The import volume of lignite was 149.8 million tons, a year-on-year increase of 12.3%; The import volume of coking coal is 98.94 million tons. The import volume of smokeless coal decreased by 23% year-on-year to 11.59 million tons.
In terms of exports, China's total coal exports from January to October 2024 reached the highest record since the same period in 2017. Specifically, the import volumes of thermal coal, lignite, and coking coal have all reached historical highs. Meanwhile, Indonesia, Mongolia, and the United States have become the main countries exporting coal to China, with Indonesia's coal exports to China reaching a record high of 189.8 million tons; Mongolia's exports to China increased by 24%, reaching 67.09 million tons.
Demand situation
Electricity coal demand:
The demand for thermal coal is the main component of the demand for thermal coal, accounting for over 60% of the total demand for thermal coal. The electricity consumption of the whole society continues to grow, especially in the second and third quarters, driven by high temperature factors, resulting in a relatively fast growth rate of electricity consumption.
New energy has become the main force for new installed capacity, and its substitution role for thermal power is constantly increasing. However, thermal power remains an important component of electricity supply, especially under extreme weather conditions.
Non electricity coal demand:
Coal used in metallurgy and building materials has experienced a slight year-on-year decline due to the weak real estate market. But the downstream chemical industry has good profits, and the increase in coal consumption is significant. The cement production from January to November 2024 decreased by 10.1% year-on-year, to 1.67 billion tons; The steel industry is still affected by weak demand for real estate and infrastructure. From January to November 2024, crude steel production decreased by 2.7% year-on-year to 929 million tons, and molten iron production decreased by 3.5% year-on-year to 783 million tons; Against the backdrop of increasing coal chemical production capacity and maintaining a relatively high price difference between oil and coal, the consumption of chemical coal has maintained rapid growth since the beginning of this year. It is expected that the annual chemical coal consumption will reach 370 million tons, a year-on-year increase of 8%.
The demand for thermal coal in other industries such as civilian use has also maintained stable growth.
Industry Outlook
Looking ahead to 2025, the thermal coal market will still face multiple factors and challenges. On the one hand, domestic coal production will continue to grow, especially with the gradual release of new production capacity in regions such as Xinjiang, Inner Mongolia, and Shaanxi; On the other hand, the imported coal market will also maintain a growth trend. At the same time, the rapid development of new energy will continue to put pressure on thermal power to replace it, but the fundamental position of thermal power in power supply is still difficult to shake. Therefore, the thermal coal market will maintain a loose supply-demand balance, but price fluctuations will still be influenced and constrained by multiple factors.
In summary, the thermal coal market in 2024 shows a stable fluctuation trend under the joint action of multiple factors. The future market trend will be influenced and constrained by multiple factors such as capacity growth, changes in import volume, and the development of new energy.
If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.