Price dynamics

Last week, the price of thermal coal showed a slight fluctuation trend. Taking Hunan Province as an example, the average coal sales price in the province last week was 1,046.58 RMB/ton, an increase of 0.6% compared to the previous period, but a year-on-year decrease of 2.3%.

Market price: Looking at different varieties, the average sales price of smokeless coal is 1,330.25 RMB/ton, an increase of 0.1%, but a year-on-year decrease of 4.9%; The average selling price of bituminous coal is 904.75 RMB/ton, an increase of 1%, but a year-on-year decrease of 0.3%. On January 10th, the price of thermal coal in the Beigang market remained stable, with a transaction price of 675-690 RMB/ton for Q5000 in the market. The external purchase price of the large group has been raised, and the updated price has been increased by 3 to 8 RMB/ton.

Price pressure: Although some coal mines have lowered coal prices to stimulate transportation, overall, coal sales in the market still face certain pressure.

Market supply and demand situation

In terms of suppl:

Most coal mines maintain normal production and sales, but some private mines have stopped production due to the approaching Spring Festival holiday, resulting in a contraction in overall supply levels. Affected by snowfall, the road capacity in some areas is poor, which affects the transportation and supply of coal.

In terms of demand:

Downstream sporadic demand inquiries, with average enthusiasm and low acceptance of high priced sources. The inventory level of the power plant is still acceptable, and there is a stable supply of imported coal from Changhe Union, so the overall procurement pressure is not high. Non electric end-users such as cement and chemicals purchase on demand, and have a strong wait-and-see attitude towards the market.

Market Atmosphere and Future Outlook

Market atmosphere: Currently, the trading atmosphere in the market has been diluted compared to the previous period, and operations are mainly cautious and wait-and-see.

Outlook for the future: Continuous attention should be paid to changes in downstream demand and actual port transactions. In the long run, the China Coal Industry Association predicts that coal consumption demand will steadily increase by 2025, but the market supply and demand relationship may still maintain a basic balance, with both temporary easing and tension.

As the Spring Festival approaches, downstream construction sites and major projects will gradually come to an end and have holidays, and downstream demand will weaken seasonally. At the same time, industries such as steel, chemical, and cement will also undergo maintenance and production restrictions before the Spring Festival, and the contraction of production capacity will lead to limited release of non electric coal demand. Therefore, the current coal market has weak supply and demand, and a wait-and-see attitude remains mainstream. It is expected that the coal market prices will operate in a narrow wave dynamic trend next week. But in the long run, with the support of national policies and the promotion of economic recovery, the demand for coal consumption is expected to grow steadily, and the coal market may usher in new development opportunities.

In summary, the thermal coal market showed a temporary stable operation trend last week. In terms of supply, the overall supply level has contracted due to the Spring Festival holiday and weather factors; In terms of demand, downstream procurement enthusiasm is average, and the acceptance of high priced sources is not high. The future market trend will be influenced by multiple factors such as changes in downstream demand, actual port transactions, and macroeconomic policies.

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