SunSirs: Continuous Loose Supply, China Thermal Coal Market is Weak

https://www.chemnet.com   Aug 16,2024 SunSirs

In terms of spot and futures: In terms of production areas, coal prices in the main production regions have slightly declined, and there is pressure on the sales of most coal mines in production. Therefore, there has been an increase in the reduction of coal mines, and most traders are holding steady and watching. In terms of ports, the risk aversion mentality of traders is currently increasing, mainly suppressing inquiries. Downstream power plants have sufficient inventory and prices continue to decline. The mainstream market price of Q5000 large calorie thermal coal in the Ordos region is between 550-570 yuan/ton, unchanged from the previous working day; The mainstream market price of Q5500 large truck thermal coal is between 650-670 yuan/ton, unchanged from the previous working day. Most coal mines in the region maintain normal production and sales, mainly through long-term supply guarantee agreements, and the overall coal supply level remains normal.

In terms of imports: The minimum bidding price for importing Indonesian coal Q3800 power plant is 477 yuan/ton, which is 114 yuan/ton lower than domestic trade coal with the same calorific value in South China ports; The minimum bidding price for Q5500 power plant is 802 yuan/ton, which is 98 yuan/ton lower than domestic trade coal with the same calorific value in South China ports. This week, the foreign trade market continued its downward trend, with coal prices slightly lowered, but imported coal still has a significant price advantage. At present, the quotes from Indonesian mining companies are slightly firm, and it is expected that there is not much room for further decline in the future; At the same time, domestic demand is difficult to release, so import traders have a lower willingness to purchase new goods

In terms of origin: The thermal coal market in Shaanxi is operating weakly and steadily. Most coal mines in the region maintain normal production, while some coal mines have been shut down due to relocation or maintenance. The overall supply is basically stable. Today, most of the pithead prices remain stable, with no significant fluctuations in the market. Some coal mines have slightly increased their prices due to previous rainfall, which has limited impact on market sentiment. Most traders still hold a wait-and-see attitude, with low operational enthusiasm. The transportation situation in the mining area is average, and there is a slight accumulation of inventory in various mines.

The power coal market in Ordos is currently operating steadily. Most coal mines in the region maintain normal production and sales, while some mining areas still have environmental and security impacts, and a few coal mines have temporary restrictions on production and sales. The current market atmosphere continues to be sluggish, and the enthusiasm for downstream coal procurement market is relatively slow. Power plants still mainly rely on long-term transportation agreements, and non electric terminals only maintain a small amount of essential purchases. Coal mine sales are overall flat, and some coal mines have slightly lowered coal prices to avoid accumulating inventory.

In terms of port: The price of thermal coal in the port market is running steadily. The upstream production areas maintain normal supply status quo, mainly through long-term contract shipping, and the market sales department is in a wait-and-see state. At present, port inventory is slowly rising, and traders' willingness to ship is increasing, resulting in a slight decline in quotes. At present, the overall market upstream and downstream are mainly cautious, and the trading atmosphere is quiet. In the short term, the fluctuation of coal prices will be relatively small, and the price will be mainly stable. In terms of price, the current closing price of Qinhuangdao Port Q5500 is 850 yuan/ton, Q5000 is 755 yuan/ton, and Q4500 is 655 yuan/ton.

The short-term contradiction between coal supply and demand is not prominent, and the continuous increase in external coal imports, coupled with the high inventory operation of downstream power plants, has led to weak fluctuations in coal prices. In the medium to long term, attention should be paid to the degree of supply disruption under safety requirements, as well as the replenishment of non thermal coal. Due to severe shortage of futures liquidity, it is recommended to take a wait-and-see approach.

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