Data from China Coal Market Network shows that as of July 24, the "CCTD Bohai Rim Thermal Coal Spot Reference Price" for 5500K, 5000K, and 4500K specifications closed at 826 RMB/ton, 736 RMB/ton, and 643 RMB/ton respectively, down 11 RMB/ton, 10 RMB/ton, and 5 RMB/ton from the beginning of the month. Looking at the overall situation in July, coal prices fluctuated and weakened in the first ten days of July, reached a turning point in the middle of the month with prices rebounding from their lows, and slowed down market transactions near the end of the month, with prices adjusting narrowly after the initial rise.

"The price of thermal coal in July experienced a decline followed by a rebound, a result of multiple market factors," said Yuan Shuai, Deputy Secretary-General of the Zhongguancun Internet of Things Industry Alliance, in an interview with the Securities Daily. He explained that entering July, the market generally anticipated increased demand due to the peak summer season, leading to strong restocking intentions in upstream trading sectors. Port and downstream power plant inventories had also accumulated to high levels, naturally suppressing prices.

A research report released by Yong'an Futures Co., Ltd. suggests that domestic thermal coal prices have recently stabilized and rebounded. Previously, coal prices had been weakening due to two main factors: firstly, the easing of overseas geopolitical conflicts led to a decline in international coal prices; secondly, the domestic rainy season resulted in weak daily coal consumption for thermal power plants, coupled with high port inventories, driving down port coal prices. Later, as expectations of tighter supply in producing areas developed and port inventories began to decrease, overall market sentiment improved, and coal prices rebounded.

The National Development and Reform Commission (NDRC) recently announced that on July 10th, the national electricity load reached a record high for the first time this year, peaking at 1.518 billion kilowatts, an increase of 10 million kilowatts compared to the previous record. Since the beginning of summer, the electricity load of the southern power grid and several provincial power grids in Guangdong, Guangxi, Hainan, Ningxia, Gansu, Fujian, and Shaanxi has repeatedly reached record highs more than 20 times. The NDRC stated that it will further enhance its ability to stabilize power generation and supply, ensure the production and supply of primary energy sources such as coal and natural gas, optimize the operation and scheduling of various power sources including wind, solar, hydro, thermal, and energy storage, and improve peak-season supply capacity.

Regarding the future trend of coal prices, the aforementioned research report believes that the core focus of the current thermal coal market is on the strength of demand realization during the peak season. From the supply side, domestic production areas are operating under normalized safety supervision, and the supply of raw coal remains tight. Against this backdrop, the actual demand for coal for thermal power generation, and whether it can effectively reduce market inventory, will directly determine the extent of the current upward trend in thermal coal prices. Supported by tight supply fundamentals and the peak summer season, coal prices still have room to rise after a sufficient correction. However, to open up sustained upward potential, it still depends on a substantial recovery in peak season demand and a continued decline in overall inventory levels. Going forward, it is necessary to continuously monitor the actual daily consumption of power plants, the pace of inventory reduction across society, and changes in overseas geopolitical situations.

"Looking ahead to the August thermal coal price trend, it will generally maintain a relatively strong trend, but the characteristics of fluctuation will still be quite obvious," said Yuan Shuai. Overall, in August, thermal coal prices will remain in a high-level fluctuation pattern due to the continued struggle between supply and demand. Market participants need to pay more attention to the pace of changes on the demand side and policy developments on the supply side, and adjust inventory levels and operating strategies accordingly. (According to Securities Daily)

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