SunSirs: Market Improvement, China Thermal Coal Demand is Stable

Trend of thermal coal market

Before the National Day holiday, the rise in coal prices reappeared. The weekly price increase of 5,500 kcal and 5,000 kcal thermal coal in northern ports exceeded 16 RMB/ton. On October 8th, the China Electricity Council (referred to as "CEC") released an index showing that the price of 5,500 kcal thermal coal was 871 RMB/ton, and the price of 5000 kcal thermal coal was 770 RMB/ton, a slight decrease of 1 to 2 RMB compared to before the holiday.

In terms of imports

The landed price of Q3800 in South China, Indonesia is about 495 RMB/ton, which is 104.5 RMB/ton lower than domestic coal with the same calorific value in South China ports; The landed price of Australian coal 5,500 in South China is about 844 RMB/ton, which is 66 RMB/ton lower than domestic coal with the same calorific value in South China ports.

Origin situation

The price of coal at the pithead has remained stable but declined. After the holiday, the enthusiasm of some terminals to stock up has decreased, and the market is mostly observing. The purchasing demand of some platforms and coal yards has slowed down, and some coal mines have reduced their coal trucks. The inventory pressure of a few coal mines has increased, and the price has been lowered by 10-20 RMB. Miners are paying more attention to the post holiday port trend and demand release situation.

Port situation

Currently, there are significant differences among traders regarding the future trend of coal prices. Some believe that demand during the holiday period has not been fully released yet, and there will still be an upward trend in coal prices in the market; Some also believe that downstream long-term cooperative shipments are sufficient, but there is insufficient price support in the later stage, leading to a cautious sentiment and a stalemate in market trading. At present, the traditional off-season market has a strong overall wait-and-see sentiment, and it is expected that the market coal prices may continue to fluctuate in the short term. Port prices, 5,500 kcal quotes 870-880 RMB, 5,000 kcal quotes 770-785 RMB, 4,500 kcal quotes 680-690 RMB

Downstream market

The phased inventory replenishment of the power plant before the holiday has been basically completed. Coupled with the continuous decrease in temperature and unit maintenance, the terminal coal consumption during the holiday has decreased compared to before the holiday. The replenishment of the power plant's inventory is still mainly based on long-term cooperative transportation, supplemented by imported coal replenishment. In the northern region, due to the early preparation of coal for heating, the inventory is showing an upward trend. The overall available days of terminal inventory are optimistic, and there is less release of market demand. In the later stage, after the long holiday consumption, some power plants' inventory may be at a low level, coupled with winter storage needs, and the expectation of terminal power plants replenishing inventory in the future is relatively strong.

In summary, considering the supply-demand relationship, policy regulation, and international market dynamics, the coal price advantage for heating is obvious, and the trend of mainly rising will be more pronounced with less decline and more increase.

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