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SunSirs: Import Continued to Increase in October, Accelerating the Decline of Domestic Steam Coal Market

November 01 2019 17:16:43     SunSirs (Selena)

  1. Price Trend

According to the monitoring of SunSirs, the market price of steam coal fell in October. At the beginning of the month, the price of steam coal was around 588 RMB/ ton, and at the end of the month, it is around 567 RMB/ ton, which is 3.57% lower than that at the beginning of the month.

  1. Analysis of Influencing Factors

The continuous increase of imported coal to some extent impacts the domestic steam coal market

Since this year, the quantity of imported coal in China has been rising steadily. According to SunSirs, at least 18.84 million tons of seaborne coal arrives at coastal ports in October 2019. In addition, about 7 million tons of coal are imported by land from Mongolia and Russia every month. Overall, the total import volume by the end of October may reach 276 million tons.

It is understood that the current procurement mode of some coastal power plants is basically 70% long-term coal + 20% imported coal + 10% market coal, and the low-price advantage of imported power coal is obvious. With the influx of imported coal, the domestic power coal market began to be impacted.

Lower power plant demand weak, steam coal price suppressed

In October, the daily consumption of the power plant decreased slightly compared with that in September, the inventory increased slightly, and the overall demand was light, which suppressed the price of power coal. According to the business association, as of October 24, the inventory of six coastal power plants was 16.051 million tons, an increase of 273,300 tons compared with September 20; the daily coal consumption was 628,000 tons, a decrease of 19,500 tons compared with September 20; the available days were 25.6 days, an increase of 1.23 days compared with September 20.

The year-on-year increase of social electricity consumption supports the power coal market

From January to September this year, the power consumption of the whole society increased by 4.4% year on year. Among them, the electricity consumption of the first industry, the second industry, the third industry and the residents' life increased 4.7%, 3%, 8.7% and 6.3% respectively year on year, and the three industries and the residents' life electricity consumption continued to maintain rapid growth.

  1. Market Forecast

Analysts of SunSirs believe that: on one hand, the supply of steam coal is still sufficient at present, on the other hand, the stage procurement of the downstream has ended. In a comprehensive view, the steam coal market is expected to remain weak in the near future. In the medium and long term, with the arrival of winter heating season, the price of power coal may stop falling at that time.

 

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