SunSirs: Energy, Consolidation of Thermal Coal Last Week (February17-21)

Price Trend

According to the monitoring of SunSirs, last week's consolidation trend of thermal coal prices was dominated. At the beginning of the week, the port price of thermal coal was maintained at about 600RMB/ ton, and at the end of the week, the price of thermal coal was maintained at about 602.50 RMB/ ton, with a slight increase of 0.42% overall. The thermal coal commodity index on February 20 was 69.49, unchanged from the previous day, down 32.54% from 103.01 (2011-11-15), the highest point in the cycle, and up 55.46% from 44.70, the lowest point on January 20, 2016. (Note: cycle refers to 2011-09-01 to now)

Analysis of Influencing Factors

Products: previously, in order to implement the national energy administration to speed up the resumption of coal mine production, ensure the stability of coal supply, all localities have made every effort to promote the orderly resumption of coal enterprises. According to the statistics of the national development and Reform Commission, as of February 11, the recovery rate of coal mines in China has reached 57.8%. Affected by COVID-19, it is difficult for coal miners to return to their posts, which leads to the shortage of coal production and the obvious reduction of production. At present, the supply of coal mines in the production area is still tight.

Industrial chain: due to the delay of holidays and the impact of the epidemic, the resumption of production of downstream enterprises was delayed, the industrial thermal coal load was operated at a low level, and the thermal coal plant continued to maintain low daily consumption. The actual demand is very few, the transaction is rare, and the port market coal volume has not recovered significantly. As of February 19, the six coastal power plants had an inventory of 17,325,500 tons, daily consumption of 393,400 tons and available days of 44.04 days. At present, most of the main thermal coal plants in the coastal areas are still mainly to realize the long-term cooperation and consume their own coal reserves, with low purchasing enthusiasm, low daily consumption, low demand for coal procurement, and limited actual transactions in the market.

Affected by the epidemic of COVID-19, as a whole, all provinces and cities delayed the resumption of enterprises, some coal mines were difficult to resume production according to the original plan, the poor transportation, which to some extent affects the coal supply. The inventory of the downstream coal enterprises is reduced, and the power plant is mainly to protect the people's livelihood. In the later stage, the market faces the risk of shortage of raw materials supply.

Market Forecast

According to analysts from SunSirs, the supply of coal mines in the production area is still tight, and private coal mines are less likely to return to work, and affected by the epidemic, it is more difficult for coal miners to return to work. The downstream thermal coal plants mostly maintain people's livelihood demand, and the overall demand is general. It is comprehensively predicted that the future power coal price will face pressure, and the thermal coal price may maintain a small consolidation trend, depending on the downstream market demand.

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