This week, the thermal coal market has shown a clear downward trend. In the Beigang thermal coal market, the transaction price range for 5,500 kcal thermal coal is 700-710 RMB/ton, while the transaction price range for 5,000 kcal thermal coal is 610-620 RMB/ton. This price performance has decreased compared to before, reflecting changes in the current market dynamics.

The main reason for the price decline

Recently, the price of port thermal coal has shown a continuous downward trend. This is mainly due to the imbalance of market supply and demand, with oversupply leading to price pressure. As an important node in the trading of thermal coal, the price changes of ports have a significant impact on the overall market.

High inventory is one of the main problems facing the current thermal coal market. Due to oversupply, inventory levels in ports and power plants continue to rise. High inventory not only increases storage costs, but also limits the room for price increases, leading to cautious purchasing behavior among production coal plants and traders.

As temperatures rise, the traditional demand for winter heating gradually weakens. Meanwhile, there has been no significant increase in industrial electricity demand, resulting in limited overall release of downstream demand. This further exacerbates the supply-demand imbalance in the thermal coal market, driving down prices.

The impact of market sentiment on the price of thermal coal cannot be ignored. Currently, due to multiple unfavorable factors such as oversupply, high inventory, and insufficient demand, market participants generally hold a pessimistic attitude. This emotion further suppresses the willingness to purchase and exacerbates the downward trend in prices.

Outlook and strategy

Market outlook: In the short term, the thermal coal market may continue to face pressure from supply-demand imbalance and high inventory. The price may continue to decline, but the decline may gradually narrow. In the long run, with the transformation of energy structure and the development of new energy, the thermal coal market will face greater challenges.

Response strategy: For coal plants and traders in the production area, they should closely monitor market dynamics and policy changes, and flexibly adjust their production and sales strategies. At the same time, strengthen inventory management, reduce storage costs, and enhance market competitiveness.

For downstream users, they can take advantage of the current low prices to increase inventory in a timely manner to cope with possible supply shortages in the future. At the same time, pay attention to the development trends of new energy, actively seek alternative energy solutions, and reduce dependence on thermal coal.

In summary, the thermal coal market has shown a clear downward trend this week, mainly influenced by multiple factors such as the continuous decline in port prices, high inventory pressure, and limited downstream demand release. The future market may still face challenges, but participants can respond by flexibly adjusting their strategies.

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