SunSirs: Limited Positive News, Weak Consolidation of China Thermal Coal

The limited price drop in the domestic thermal coal market this week also demonstrates the resilience of the market and the rigidity of demand. Although the risk of coal price decline still exists, with the release of the risk of decline, some market participants' emotions are divided, believing that the peak summer is approaching its end, and there are currently no favorable factors supporting the upward trend of coal prices, so they are still mainly observing and waiting.

In terms of imports: This week, most imported coal prices have been deadlocked, and downstream market demand follow-up is still poor. The pressure on traders to obtain goods has increased, forcing foreign pithead quotes to be lowered. In addition, this week's low calorie coal bidding prices have broken through the bottom line, hitting a new low for the year, and the willingness of end-users to purchase goods has increased.

In terms of origin: This week, most of the coal mine quotations in the production area have been lowered, and coal mine production is normal. However, downstream demand is not following up enough, and sales of various coal types are under pressure. Coal mine inventory has accumulated, and quotations have been lowered one after another to stimulate sales; But there are also coal mines that can maintain production and sales balance due to remaining inventory pressure and have relatively firm quotations. At present, large state-owned coal enterprises mainly rely on the transportation of Changhe Union and rigid demand at the pithead, and the inventory pressure of coal mines is not high, which provides certain support for the price of thermal coal. On Tuesday of this week, Shenhua's external purchase price was lowered by 12-15 RMB/ton. In addition, the purchase price of Weiqiao Power Plant was also lowered. Some market participants' emotions were divided, and some believed that the peak summer season was coming to an end. There were currently no favorable factors supporting the upward trend of coal prices, and they were still mainly observing and waiting,

In terms of port: This week, the high-quality coal prices at the port have been relatively firm, while the prices of other coal types have been lowered. Traders are bearish on the future market, and their willingness to ship has increased. However, downstream purchases are still mainly at a lower price, and there is no significant willingness to replenish inventory at the current price. The trading atmosphere in the port market is deadlocked, and the actual trading volume is limited. The upstream and downstream are still in a game.

From a supply perspective, as the end of the month approaches next week, some private mines may cease production due to the completion of production tasks, resulting in a certain contraction in output; From a demand perspective, the national temperature has fallen slightly, and the demand for civilian electricity has decreased in the market. The daily consumption of power plants may accelerate, and the demand for coal in the market will continue to weaken; The non electricity market is still in the traditional off-season, and there should be no significant change in the demand for coal in the market. Overall, although production will contract slightly next week, the overall pattern of supply exceeding demand is difficult to change, and there are no obvious positive factors to boost it. Therefore, it is expected that the price of thermal coal will be weakly adjusted next week, and the adjustment range of coal mine quotations will be mostly between 5-15 RMB/ton.

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