This week, the price of thermal coal has stopped falling and stabilized, with sufficient supply in the main production areas. However, traders and coal factories are cautious about stockpiling, and demand has not been released on a large scale, putting pressure on coal prices.
Supply and demand dynamics
Supply side: The production and sales of coal mines in the main production areas are normalized, and the overall supply is stable; The Southwest region has experienced a slight decline in daily thermal power consumption due to the squeezing of hydroelectric power generation during the flood season.
On the demand side: High temperature weather has driven up residents' demand for refrigeration, resulting in an increase in daily consumption of thermal power. However, the substitution effect of clean energy is significant, and terminal procurement is still mainly based on essential needs.
Inventory and daily consumption
The daily coal consumption of 462 household appliances in China is 3.416 million tons (+53,000 tons compared to the previous period), with inventory of 87.881 million tons (+2.101 million tons compared to the previous period), and available days of 25.7 days (+0.2 days compared to the previous period).
Inner Mongolia market
Weak operation: Coal mines mainly rely on long-term cooperative shipping, with stable supply; Market users (coal washing plants, traders) have low enthusiasm for transportation, and coal mines offer price reductions and promotions (with a single reduction of 5-10 RMB/ton), but sales have not shown significant improvement.
The coal prices in some areas of Ordos are as follows: Q5500 pit mouth tax inclusive quotation is 400-450 RMB/ton, Q5000 pit mouth tax inclusive quotation is 300-350 RMB/ton, Q4500 pit mouth tax inclusive quotation is 260-290 RMB/ton, all of which are pit mouth tax inclusive quotations.
Shaanxi market
Weak stable operation: Most coal mines are operating normally, with a few shutdowns due to maintenance, and the market coal supply is sufficient; High port inventory and weak terminal demand suppress market sentiment, resulting in slow shipments from mining areas. The Q5500 thermal coal in Yulin, Shaanxi is priced at 420-450 RMB/ton, Q5800 is priced at 460-481 RMB/ton, Q6000 is priced at 485-600 RMB/ton, and Q6100 is priced at 510-610 RMB/ton, all of which are quoted at the pithead including tax.
Auction performance: Most coal types in the Shaanxi Coal Mine auction failed to meet the bidding standards or had limited premiums, reflecting a strong market wait-and-see sentiment.
Beigang Power Coal Market
1. Prices first suppressed and then stabilized during the week, with Q5500 currently priced at 620 RMB/ton and Q5000 currently priced at 535 RMB/ton. 2. The price difference between buying and selling is significant, and traders are reluctant to ship at low prices due to cost support, resulting in downstream price cutting purchases and a price stalemate
Future prospects
1. Demand driven: As the "peak summer season" approaches, the demand for power plant replenishment may gradually be released, and some enterprises may adjust their coal type structure.
2. Price pressure: In the short term, the growth of terminal daily consumption is weak, coupled with high inventory and clean energy substitution, coal prices will still be under pressure; The main production areas need to pay attention to the progress of destocking and changes in port transactions.
3. Risk factors: Extreme weather, fluctuations in hydropower output, and policy regulation may become market turning points.
The loose supply and demand pattern in the thermal coal market has not changed this week, and prices are mainly weakly stable. We need to pay attention to the sustainability of high temperature weather and the pace of terminal inventory replenishment in the future. It is expected that the market will fluctuate and adjust in the context of "high supply and stable demand".
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