1. Port prices

The thermal coal market in the Bohai Rim ports continues to decline, with prices for different calorific value coal types generally decreasing. Among them, the mainstream quotation range for 5,500 kcal thermal coal is 825-835 RMB/ton, a decrease of 5-10 RMB/ton from last week, and the market inquiry enthusiasm is average; The quoted price for 5,000 kcal of thermal coal is about 725-735 RMB/ton. In actual transactions, there is usually a price fluctuation of 5-10 RMB/ton for low sulfur high-quality resources; The price range for 4,500 kcal of thermal coal is 630-640 RMB/ton, and the downstream willingness to receive goods is not strong. The continuous increase in port inventory has significantly suppressed coal prices.

2. Origin price

The coal prices in the main production areas have generally decreased, and the market has a strong wait-and-see attitude. The sales of coal mines in Yulin, Shaanxi are under pressure. The ex factory price of 5,500 kcal coal has dropped by 15-20 RMB/ton compared to last week, and the price of 6,000 kcal raw coal has dropped even more significantly, reaching 20-25 RMB/ton. The price of 5,000 kcal thermal coal in Ordos, Inner Mongolia has dropped by 10-15 RMB/ton, and some coal mines continue to slightly lower prices to promote sales; In contrast, the demand in the lump coal market is relatively stable, with overall prices remaining stable and limited fluctuations.

3. Market dynamics

Demand side: The daily coal consumption of downstream power plants has rebounded at a slower rate than expected, and inventory levels are generally above the safety line. The available days of coal storage are maintained at a relatively ideal state. In this context, the procurement pace of power companies has slowed down, mainly focusing on executing long-term contracts and purchasing imported coal with higher cost-effectiveness. They are cautious about market coal procurement and have a strong willingness to lower prices.

Supply side: Several coal mines in the main production areas have lowered their coal prices, and some coal mines that have completed their annual production tasks have begun to voluntarily reduce production. Some coal mines have also entered a period of equipment maintenance, resulting in a contraction in production. However, the railway department is fully committed to ensuring the transportation of electric coal, and major coal transportation channels such as the Daqin Line and Tanghu Line maintain a high shipping status. The continuous accumulation of coal inventory in northern ports has put sustained pressure on coastal coal prices.

In terms of the imported coal market, Indonesia's low calorie coal price advantage continues to expand. At present, the onshore bidding price of 3,800 kcal thermal coal in Indonesia has dropped to around 468 RMB/ton, which is about 112 RMB/ton lower than the onshore price of domestic coal with the same calorific value, and the price difference is very significant. Despite the obvious price advantage, due to differences in market price trends in the later stage, end users still remain cautious in purchasing imported coal, and the phenomenon of large-scale centralized procurement has not yet emerged.

4. Future expectations

Market analysis suggests that the loose supply and demand pattern in the thermal coal market is difficult to quickly reverse in the short term. It is expected that coal prices will continue their weak downward trend in early December, and the prices of various calorific value coal types may continue to fall by 20-30 RMB/ton. With the arrival of the traditional winter coal peak period in mid to late December, the heating demand in northern regions will significantly increase, and the daily coal consumption of power plants is expected to steadily rise. Driven by demand, coal prices are expected to gradually stop falling and rebound. At that time, the price of 5,500 kcal thermal coal may rebound to a reasonable range of 830-840 RMB/ton. We need to closely monitor the comprehensive impact of temperature changes, coal consumption rhythm of power plants, and import policy adjustments on the market in the future.

Medium to long term: The peak season for coal consumption in winter is the decisive variable. As temperatures continue to drop and hydropower output weakens, the daily coal consumption of power plants is expected to significantly increase. Once inventory consumption accelerates and downstream centralized replenishment demand is activated, coal prices are expected to usher in a new round of upward trend.

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