This week, the overall thermal coal market showed a weak and stable stalemate pattern, with supply and demand fundamentals remaining loose and excess, limited price fluctuations, and a strong wait-and-see sentiment in the market. The core contradiction lies in the game between the suppression of high inventory and the expectation of seasonal demand recovery.
1. Price performance:
Origin: There are mixed ups and downs, but the number of coal mines that have lowered prices is slightly higher, indicating a slight weakening trend. The average price of 5,500 trucks in Ordos is 425 RMB/ton, and the average price of 5,000 trucks is 350 RMB/ton.
Port: Extremely deadlocked, prices are basically stable. The mainstream quotation for 5,500 kcal is 620-625 RMB/ton, and for 5,000 kcal it is 535-540 RMB/ton. Downstream procurement is limited and there is no centralized replenishment. Suppliers accept the current situation.
Imported coal: Prices continue to decline, leading to a slight expansion of the price advantage between imported coal and domestic coal.
2. Supply and inventory:
North Port Dispatch: The daily average import volume of the Bohai Rim 8 ports is 1.1146 million tons (month on month -1.016 million tons), and the daily average export volume is 1.2174 million tons (month on month -1.544 million tons). Inventory continues to decline (decreasing by 720,000 tons to 27.27 million tons), but the absolute value remains at a high level during the same period.
National port inventory: The overall level remains at a high level.
Core issue: The sustained and significant suppression of market prices by high inventory levels.
3. Demand side:
Coastal region: oscillating operation with little change, with a weekly average slightly lower than the same period last year. There has not been a clear signal of recovery yet.
Inland: oscillating operation, slight rebound, overall comparable to the same period last year.
Terminal inventory: slightly increased, but still lower than the same period last year, indicating that there is room for replenishment.
Procurement behavior: Overall procurement is often delayed, and end users have a clear wait-and-see attitude.
Next week's outlook:
The market is expected to continue the weak stable stalemate pattern in the short term, and there will be a significant improvement in transaction difficulty. The core focus is on the recovery and sustainability of demand (daily consumption):
1. Expectation of demand recovery: June is a period of traditional demand recovery, and the current daily consumption is basically the same as last year.
2. Pessimistic scenario (price weakening): If daily consumption growth is weak, end users are likely to continue adopting a strategy of delaying procurement. Under high inventory pressure, coal prices are likely to further weaken.
3. Supply side: Expected to have little change, not the main contradiction point.
4. Impact of hydropower: It is necessary to closely monitor the output of hydropower, as its squeezing effect on the daily consumption of thermal power is a key uncertainty factor affecting coal prices.
Summary:
The current thermal coal market is in a typical weak equilibrium state of "high inventory, weak demand, and stable supply". The price stalemate reflects the game between buyers and sellers: suppliers are unwilling to significantly reduce prices under the background of cost support and destocking, while terminals lack the motivation to make large-scale purchases due to high inventory and demand not exceeding expectations. The daily consumption data of coastal and inland areas in the next 1-2 weeks, especially the year-on-year growth rate, will be the most critical indicator for breaking the current deadlock, determining the weak stability of price direction, slight rebound or continued decline. Market participants need to closely monitor the pace of daily consumption recovery and the situation of water and electricity substitution.
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