The thermal coal market in August showed a high-level oscillation pattern under the game of supply and demand, and the price driving factors and future trends can be analyzed in depth from the following dimensions:

In terms of origin: Firstly, from the supply side, the situation is quite complex. The prices of coal mines in major production areas such as Inner Mongolia and Shaanxi are still rising, with an increase of 5-10 RMB/ton, but some mines have started to lower their prices. For example, the foam coal from Erdun Coal Mine in Yuyang has dropped by 10 RMB, mainly because it rose too much before and now the demand is slightly weaker. What's even more troublesome is that recently it has been raining in the production area, coupled with environmental inspections, which has affected the production of some coal mines, resulting in a particularly scarce supply of good coal (such as 5,500 kcal high calorific value coal), and less sought after coal.

In terms of ports: The situation at the port is also very complicated. The inventory of northern ports has been decreasing, and traders do not have much good coal in their hands, so they have raised prices too high. The quoted price for 5,500 kcal of coal exceeds 680 RMB/ton. But the power plant felt it was too expensive and desperately tried to lower the price, resulting in not many actual transactions, creating an awkward situation of "prices hanging but no one buying".

In terms of imports:

There are some advantages to importing coal on this side. The landed price of low calorie coal (3800 kcal) in Indonesia is about 409 RMB per ton, which is cheaper than in China. However, the power plant is still desperately trying to lower prices, and there are not many actual transactions. Everyone is watching.

In terms of demand: August is already the peak season for coal consumption. This summer is particularly hot, and power plants burn more coal every day than in previous years, causing a significant decrease in inventory. Some power plants only have enough coal to last for 12 days. Although hydropower has generated a lot of electricity before, the flood season is coming to an end and the power generation is beginning to decrease. Wind and solar power are also unstable, and in the end, they still have to rely on thermal power to sustain themselves, so it is difficult for coal prices to fall.

Looking ahead, coal prices in September may go like this: if the hot weather continues until mid September and power plants urgently replenish their inventory, port coal prices may soar to 700 RMB. But if a few typhoons suddenly cool down, or if a large amount of imported coal arrives, the price may also fall. The most likely scenario is still fluctuating back and forth between 650-700 RMB.

For thermal coal plants that buy coal, they can buy some imported coal now and replenish some when the long-term contract coal guaranteed by the state is released in September. Traders need to be careful, such high prices could easily fall into their hands if policies intervene to regulate them. Although ordinary people do not directly buy coal, the high price of coal makes it worth paying attention to whether electricity bills will be adjusted in the future.

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