The current thermal coal market as a whole presents a pattern of "stable production areas with a slightly stronger trend, bullish port sentiment, and downstream demand waiting to be released". The market is in a transitional period of seasonal demand conversion, and all parties have positive expectations for the future. However, the large-scale release of actual demand has not been fully realized, and price support mainly comes from emotions and expectations, rather than strong immediate consumption.

Deep analysis of regions and links

1. Origin (Shaanxi, Shanxi, Ordos): Stable supply, price differentiation

Supply side: Coal mining production in the three major production areas is normal, and the supply level is stable, which is the basic market. Shanxi mainly focuses on ensuring long-term cooperative shipping, with relatively limited sales of coal in the market.

Price side:

Shaanxi: After the concentrated increase in the previous two days, it was temporarily stable, indicating that prices need time to digest the increase and wait for further follow-up of demand. The tax inclusive rate for Q5500 pit mouth in the current area is 560-580 RMB/ton, for Q5800 pit mouth is 600-610 RMB/ton, and for Q6000 pit mouth is 610-620 RMB/ton.

Ordos: The most active, driven by winter storage in the north and port sentiment, prices have slightly increased by 5-10 RMB/ton, showing strong upward momentum.

Driving factor: The increased enthusiasm of traders and platform operators is the main driving force behind the rise in pithead prices. They are optimistic about the future market and are hoarding or shipping goods to ports.

2. Port: Emotionally driven, stable but strong

Core contradiction: The bullish sentiment of traders is in conflict with the limited actual demand downstream.

Reasons for bullish sentiment:

The continuous decline in port inventory has intensified market concerns about future supply shortages. The price at the place of origin has risen, and the cost of shipping to the port has increased. Traders have a willingness to raise prices. The expectation of the upcoming winter heating demand is strong. The inventory of downstream power plants is at a medium high level, and there is not much pressure to replenish inventory. The acceptance of coal in the current high price market is limited, resulting in a situation of "high offer, low counteroffer" and limited actual transactions.

3. Downstream (power plants): high inventory suppression, cautious procurement

Current situation: The daily consumption of terminal power plants is still at a seasonal low, and the inventory level is relatively high. With the stable supply of long-term cooperative coal and effective replenishment of imported coal, power plants have very limited demand for high priced market coal procurement and only maintain rigid replenishment. Potential variables:

In November, large-scale heating in the north will be launched, which will directly drive the heating load, and the daily consumption of power plants is expected to significantly increase. In winter, the output of hydropower will weaken, and the "ballast stone" effect of thermal power will become more prominent. The demand for coal is expected to increase with certainty. Some power plants have started winter storage plans, and demand is beginning to be released in small quantities, which is a positive signal but has not yet formed a scale.

4. Imported coal: internal and external linkage, price strengthening

Trend: Linked with the international market and domestic port market, prices tend to be strong.

Reason:

Foreign mining prices are rising: Indonesian mining companies are offering firm quotes.

Domestic demand transmission: The rise in coal prices at domestic ports and the demand for replenishment from coastal power plants have driven up the bidding prices of imported coal from distant months for power plants (such as the bid price increase of 11 RMB/ton for Q3800 of Guangdong Power Plant).

Function: As an effective supplement, imported coal has to some extent suppressed the rapid rise of domestic coal prices, but its own price strengthening has in turn supported domestic coal prices.

Future prospects and key driving factors

Short term (1-2 weeks in the future):

Coal prices are expected to maintain a stable to strong trend. The direct driving force of prices comes more from the supply side (port destocking, pithead price hikes) and the emotional side (bullish expectations), rather than a large number of actual transactions on the demand side. There is a possibility of a stalemate due to traders' reluctance to sell and downstream resistance.

Mid term (entire winter):

There is a strong expectation of price increase. The core driving factor is the actual daily consumption increase caused by the decrease in temperature. Once the inventory of power plants begins to rapidly decline due to sustained high daily consumption, large-scale replenishment demand will be initiated, and market coal prices will receive strong support at that time.

Summary: The current market is in a bullish phase. The first wave of price rise has been ignited by the expectations of winter storage and port sentiment, but the real "rainstorm" (large-scale release of demand) has not yet arrived. The future price trend will depend on the game between the demand intensity brought by actual cold weather and the buffering effect of current high inventory.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.