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SunSirs: Demand for Thermal Coal is Poor in China and Prices Continue to Decline

February 24 2021 11:07:06     SunSirs (Selena)

According to the monitoring of SunSirs, the price of steam coal continued to fall. On February 23, the average port price of steam coal was maintained at 608.75 RMB/ ton, up 5.55% year on year. On February 22, the thermal coal commodity index was 74.85, down 1.96 points from the previous day, down 40.12% from the cycle's highest point of 125.00 points (2021-01-19), and up 67.45% from the lowest point of 44.70 points on January 20, 2016. (Note: period refers to 2011-09-01 to now).

Origins: after Spring Festival, the supply of coal mines basically recovered, and the supply side as a whole was obviously loose compared with previous years. In order to do a good job of epidemic prevention and control, during the holidays, large coal mines generally do not have holidays for normal production. At the same time, most of the mines have fewer days off, enterprises do not stop work, or some enterprises return to work early, some stocks are on the high side, enterprises do not ship well, and prices have declined.

In terms of downstream power plants: due to the recent rise in temperature, the demand for civil coal has weakened, and the daily consumption of downstream power plants has decreased. Both sides are still in a strong wait-and-see mood, with obvious price reduction and low transaction activity. The demand is not good, and the inventory pressure of upstream and port is large. At present, the mainstream open position price of 5500 kcal coal is about 590-605 RMB/ ton.

Macro: according to the data released by the National Bureau of statistics on February 19, the national coal prices rose and fell in early February. The specific price changes of all kinds of coal are as follows: anthracite (washing block, volatile matter ≤ 8%) price is 950 RMB/ ton, 20 RMB/ ton higher than the previous period, or 2.2%. The price of ordinary blended coal (Shanxi pulverized coal and lump coal blended coal, calorific value 4,500 kcal) was 558.3 RMB/ ton, down 143.5 RMB/ ton or 20.4% compared with the previous period. The price of Shanxi Dabiao (better quality blended coal with calorific value of 5,000 kcal) was 626.7 RMB/ ton, down 157.7 RMB/ ton or 20.1% over the previous period. The price of coking coal (main coking coal, sulfur content < 1%) was 1,540.0 RMB/ ton, up 34.3 RMB/ ton or 2.3% over the previous period.

SunSirs analysts believe that: from the end of November 2020 to the middle of January 2021, the price of thermal coal will rise, and the price of thermal coal will continue to fall after the festival, because the national temperature rises significantly, and the demand for civil heating power will weaken. The available days of coal storage increased. At this stage, the national temperature is in a sustained upward trend, and the support of civil power is not available. On the whole, the price of thermal coal during the spring festival may remain weak, and the demand of downstream market will be taken into consideration in China.


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