SunSirs: Market Analysis of China Thermal Coal in 2022

https://www.chemnet.com   Jan 29,2023 SunSirs

According to the survey data of SunSirs, the overall trend of thermal coal in 2022 is volatile. In the first half of 2022, China will continue to promote the work of increasing production and ensuring supply of electric coal to ensure the stability of domestic power consumption. We will do our best to increase production and ensure supply of coal, so 2022 is also a year when the price of thermal coal fluctuates.

In January, the domestic thermal coal market was generally stable and strong, mainly due to the safety guarantee and the limited increase in coal production, and the overall strong market. The port coal price rose first and then stabilized, while the coal price of the origin rose and fell slightly. With the late Spring Festival approaching and the completion of downstream production preparation, both supply and demand are weak, and the market maintains stable operation.

In the aspect of origin in early February, production resumed in the mines after the Spring Festival. Affected by the policy, the price of coal mostly went down; In terms of downstream power plants, the marketable resources in the market are relatively small, and the spot resources are tight. However, affected by the policy, the port sentiment is weak, and the actual transaction is less. In the middle of the month, the price of thermal coal is weak, and the coal mines have resumed production. Affected by the policy, the coal price has returned to a reasonable range, and the number of coal hauling vehicles has increased; In terms of downstream power plants, the port market quotation continues to decline, and downstream terminals purchase on demand, mainly on the wait-and-see basis.

In March, most of the coal mines maintained normal production. Due to the impact of public health events, the control of the mining area was relatively strict, the production of coal was limited, and the state-owned large mines mainly relied on long-term coordinated transportation; In terms of downstream power plants, the port market is now dominated by long-term cooperation and guaranteed supply of coal. However, due to the release of demand from downstream power, chemical and other enterprises, the purchase enthusiasm is high, so the price increases.

In April, the coal production in the main producing areas was generally stable, but because April was the off-season, we had to wait and see the market, and the market transactions were general. Large state-owned mines were mainly long-term coordinated transportation; In terms of downstream power plants, the port market is now dominated by long-term cooperation and guaranteed supply of coal. The downstream terminals purchase on demand, and the traffic and investment are deadlocked, and the wait-and-see mood is strong. Traders are in a strong attitude towards price, but the downstream acceptance is not high.

In May, the thermal coal market was in a stalemate, and the balance of production and sales was basically maintained in coal mines; In terms of downstream power plants, the port market is now dominated by long-term cooperation and guaranteed coal supply, and downstream terminals purchase on demand, with limited transactions and strong wait-and-see mood. The demand of non-electric users such as chemical industry is stable.

　　In June, the overall price of thermal coal rose first and then fell. The production of coal in main production areas has been tightened recently due to safety production, but most coal mines have actively implemented the coal for medium and long term cooperation and large household use. There are few resources available for sale in the market. Now the overall wait-and-see mood is dominated; In the downstream port market, the terminal daily consumption has rebounded recently, but the purchase price is still lower, the traders' quotations are firm, and the prices are slightly higher, and the overall transportation is still dominated by long-term coal. In June, the price of thermal coal was generally sluggish in the peak season.

In July, the price of thermal coal fell as a whole, and the coal mines in the main producing areas maintained normal production recently. Some coal mines had a small decline in output due to coal management tickets, and most coal mines were mainly cashing in long-term coal, and the market coal resources were relatively tight; In the downstream port market, the operation was weak this month. Although the daily consumption of the terminal increased in high temperature weather, the overall transportation of the power plant was still dominated by long-term coal. The demand for coal in the market has not increased significantly, and the wait-and-see mood is strong.

In August, the overall price of thermal coal fell first and then rose. In terms of origin at the beginning of the month, because the coal pipe tickets were relatively sufficient at the beginning of the month, most coal mines were in normal production, but most of them actively cashed in long-term coal. Downstream users are ordered to transport, and the coal mine is basically out of stock. Downstream chemical industry and other non-electricity procurement are mainly based on rigid demand in the near future. At the end of the month, most of the coal mines are in normal production, with good sales, and the enthusiasm of the downstream buyers is good. In the downstream port market, it is still mainly to supplement the long term coal, and the long term coal is more active. Traders are in a high mood of price increase, but the downstream still maintains the purchase in demand, and the market transaction is average.

In September, the overall price of thermal coal was relatively strong. In terms of the origin, affected by the epidemic situation and the safety reduction in production, the coal mines are now dominated by long-term cooperative coal, and the market supply is still relatively tight. The supply is reduced and the market trading atmosphere is acceptable, which has strong support for coal prices. In terms of downstream ports, the price is mainly strong. Downstream non-electricity demand is acceptable. In addition, due to the arrival of the National Day holiday, enterprises actively stock up, coal supply is in short supply, and the overhaul of the Daqin Line still has strong support for the rise of coal prices.

In October, the overall price of thermal coal was relatively strong. In terms of the origin, affected by the epidemic situation and the safety reduction in production, the coal mines are now dominated by long-term cooperative coal, and the market supply is still relatively tight. The supply is reduced and the market trading atmosphere is acceptable, which has strong support for coal prices. In terms of downstream ports, the price is mainly strong. The overhaul of Daqin Line has reduced the amount of coal entering each port. Traders' quotations are firm and their willingness to ship is strong. However, downstream power plants mainly purchase on demand and have a wait-and-see mentality.

In November, the price of thermal coal was generally weak. In terms of the origin, affected by the epidemic situation and the safety reduction in production, the coal mines were mainly long-term cooperative coal. In addition, the coal price fell as a whole, with a drop of 50-100 RMB/ton, and the market trading atmosphere was generally general. In addition, due to the impact of public health time, it is difficult to ship coal, and the wait-and-see mood is strong. In terms of downstream ports, traders' quotations were weak, with a wait-and-see attitude. In addition, the overhaul of Datong-Qinhuangdao Railway still has a relatively limited volume. Downstream customers are generally motivated to pick up goods, deal less, and generally accept high prices. The daily consumption of the power plant is stable and the safety stock is maintained.

In December, the price of thermal coal was weak and the market trading atmosphere was general. Most of the coal mines in the main production areas mainly guarantee the supply of long-term coal, and with the major inspection of coal in winter, the overall supply of coal is limited. The overall wait-and-see mood of the market is strong, and the downstream multi-dimensional purchase is mainly based on rigid demand, and some coal mine shipments are average.

Analysts from SunSirs believe that in terms of origin, thermal coal is now mainly safe and the coal increment is limited. In terms of downstream ports, as the Spring Festival approaches, the downstream is still mainly wait-and-see for thermal coal, and the enthusiasm of power plant procurement is general, and the transaction is relatively weak. It is comprehensively estimated that the price of thermal coal will be mainly consolidated in the later period. However, as the temperature rises after the year, the downstream construction starts and the demand increases, there is still demand for thermal coal, and the price of thermal coal may rise. According to the data of the National Development and Reform Commission, there are about 50 million tons of coal that can be dispatched by the government. At present, it is stable at a high level of about 175 million tons, and the number of available days reaches 22 days, which can effectively guarantee the need for peak shaving. In view of the supply side, it is estimated that the upward space of thermal coal price may not be large, depending on the downstream market demand.

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