SunSirs: China Thermal Coal is under Pressure, and There is a Strong Wait-and-see Sentiment

Recently, the thermal coal market has faced multiple pressures, showing an overall trend of pressure, and the market's wait-and-see sentiment has significantly intensified.

As of December 17, 2024, the price situation of thermal coal is as follows:

Port thermal coal price:

The price of 5,500 kcal of thermal coal (CCI5,500) is 810 RMB/ton, which has fallen below the low of April 2024 and set a new low for the year.

The price of 5,000 kcal of thermal coal (CCI5,000) is 709 RMB/ton.

The price of 4,500 kcal of thermal coal (CCI4,500) is 612 RMB/ton.

The following is a detailed analysis of the current dynamics of the thermal coal market:

From the perspective of favorable factors, the outflow of the Three Gorges Reservoir remains at a low level, which to some extent reduces the demand pressure on thermal coal in the electricity market. However, the profits from shipping 5,000 and 5,500 from the production area to the port are both low, indicating that the transportation cost of coal is relatively high, which has a certain suppression on the price of thermal coal. Despite the high daily coal supply of power plants nationwide, the price of thermal coal has not been significantly supported due to other negative factors.

On the negative side: The national power plant inventory and the total social inventory of thermal coal are both at a high level, indicating an oversupply of thermal coal in the market and pressure on prices. In addition, the low proportion of coal mine shutdowns in production areas indicates that coal production is still sufficient, further exacerbating the situation of oversupply in the market. Although the daily freight volume of Hohhot Railway Bureau remains high, the low number of ships operating in northern ports may lead to a backlog of coal at the ports, further affecting the timely supply and price stability of thermal coal.

In terms of data changes, the daily average freight volume of Hohhot Railway Bureau shows a rapid expansion trend, but the international coal price advantage in the Asia Pacific region, the imported Indonesian coal price advantage, and the European international coal price advantage are all rapidly shrinking, indicating that the competition in the international coal market is becoming increasingly fierce, which has a certain impact on the domestic thermal coal market. At the same time, the daily average freight volume of the Shuohuang Line has rapidly expanded, reflecting the diversification and increased flexibility of coal transportation channels.

In terms of market sentiment, investors and market participants generally hold a cautious attitude, with strong bearish expectations. The market sentiment index shows that the bullish ratio is only 11%, while the bearish ratio is as high as 89%, and the flat ratio is relatively low, which further confirms the intensification of market wait-and-see sentiment. Investors are waiting for further market clarity to make wiser investment decisions.

In summary, the thermal coal market is currently under significant pressure, and the market's wait-and-see sentiment is intensifying. Investors and market participants should closely monitor market dynamics and operate cautiously to cope with possible market changes. At the same time, the government and relevant institutions should strengthen market supervision and policy guidance to promote the healthy and stable development of the thermal coal market.

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