Main production market: Different coal types have varying price performances, and the overall market is weak

On that day, coal trading in the main production areas showed a clear differentiation trend, with block coal prices showing relatively stable performance, while foam coal prices faced downward pressure, and market participants mostly held a wait-and-see attitude.

Price adjustment situation

The price of lump coal is stable with an upward trend: some lump coal products represented by Huineng AnRMB West Wash Foam Coal (calorific value of 5,200 kcal) have increased their prices by 5 RMB/ton, while the prices of varieties such as Hongqingliang Mixed Block have also increased synchronously. Due to its high calorific value, ease of mechanized operation, and stable combustion, lump coal mainly meets the high calorific value demand during heating periods and in some industrial fields, and its price has been supported recently.

The price of foam coal has generally decreased: the foam coal prices of coal mines such as Jintai and Erlintu have dropped by 5-10 RMB/ton. The fine particle size of foam coal is mainly targeted at cost sensitive users. In the current situation of sufficient inventory and weak procurement demand in power plants, sales pressure is high and prices are falling.

Supply and demand status and market mentality

Supply situation: After New Year's Day, coal mine production and sales activities have basically resumed normal, and the amount of resources transported to ports has gradually increased. However, due to weak downstream purchasing willingness, traders' enthusiasm for shipping to ports has been dampened, resulting in a slight increase in inventory at the production site.

Demand situation: Although the low temperature in winter has slightly increased the daily consumption of power plants, the overall level is still relatively low. The inventory of key power plants is higher than that of the same period in history (for example, the six major coastal power plants had 13.375 million tons of coal stored on January 1, with a usable period of about 15.9 days), and there is insufficient power for large-scale replenishment. The demand for non electricity industries such as chemical and cement is weak, and only a small amount of rigid procurement is maintained.

Port market: inventory decline supports quotes, high price transactions are limited

The coal inventory in the northern Bohai Sea ports continues to be consumed, and has dropped to a level of about 27 million tons. Although traders have the intention to raise prices, the high inventory strategy of power plants has suppressed the actual procurement scale, resulting in low market transaction activity and price fluctuations in the high range.

Price performance: The overall coal quotation at the port remains stable, while some low calorific value coal types (such as 5,000 kcal) have slightly increased in price to about 610 RMB/ton due to increased inquiries; The demand for high calorific value coal (such as 5,500 kcal) is flat, and the price increase space is limited.

Inventory dynamics: The inventory of ports around the Bohai Sea continues to decline (taking January 6th data as an example, inventory has decreased compared to before). The main reason is that there is a price inversion (cost higher than selling price) when shipping to the port, and traders are unwilling to sell at low prices, resulting in a reduction in the amount of coal imported into the port.

Ports along the Yangtze River and the imported coal market: price linkage increases, weak demand foundation

1. Ports along the Yangtze River:

Coal prices have been adjusted in line with the rise in the northern port market, but due to insufficient support from actual terminal consumption, it is expected to mainly consolidate at a high level in the short term.

2. Imported coal market:

Indonesian coal: Due to the delay in the approval process of mining permits (RKAB), the export of small and medium-sized mines is restricted, and the market supply is tight. The offshore quotation for 3,800 kcal thermal coal remains at 49-50 US dollars/ton, with a difference of only about 3 RMB/ton between the onshore cost and domestic coal price, and the price remains firm.

Australian coal: The landed price of high calorific value coal (such as 5,500 kcal) is about 700-710 RMB, which continues to be higher than the domestic price of coal of the same quality, and the import quantity is limited.

Market sentiment: Due to the possible reduction in production and expected export tax policies in Indonesia, the supply of imported coal in the market is expected to be tight, and there is a short-term upward trend in prices. However, due to sluggish domestic demand, the expected increase is limited.

Outlook for the future: Short term minor fluctuations are the main focus, and attention should be paid to climate and inventory changes

Overall, the recent thermal coal market has shown characteristics of "differentiation of production areas, high-level consolidation of ports, and support for imported coal prices". It is expected that the market will continue its narrow range oscillation trend in the short term. We need to closely monitor the continued impact of cold wave weather, power plant inventory consumption, and related policy adjustments in the future.

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