SunSirs: China Thermal Coal Price Increased Last Week (February 18-23)

According to the commodity analysis system of SunSirs, the price of thermal coal rose last week. On February 22, the energy index was 1,022 points, an increase of 1 point from yesterday, a decrease of 34.53% from the highest point in the cycle of 1,561 points (2021-10-21), and an increase of 100.00% from the lowest point of 511 points on March 1, 2016. (Note: The cycle refers to 2011-12-01 present)

In terms of production areas, coal mines returning from the Spring Festival have gradually resumed production, and most coal mines in the Ordos region of Inner Mongolia have maintained normal production and sales, with long-term cooperative shipping being the main focus. Recently, due to rainy and snowy weather, transportation is not smooth, and overall transportation is average. However, some coal mines have sold well, resulting in price increases. However, downstream procurement is still mainly based on demand, which generally supports coal prices.

In terms of downstream ports, coal prices overall rose last week, with data showing a decrease of 1.569 million tons in port inventory in the Bohai Rim region compared to pre holiday inventory during the Spring Festival. As inventory decreased and post holiday production resumed, port coal prices rose. However, downstream purchases are mainly based on demand, with less market demand, and long-term coal contracts are used for transportation. After continuous increases in coal prices, market transactions have declined and prices have remained weak and stable.

According to data released by the National Bureau of Statistics on February 14th, prices of various coal types in China continued to decline in the first half of February. The specific price changes of each coal type are as follows: the price of anthracite (washed in chunks, volatile matter≤8%) is 995.0 RMB/ton, which is unchanged from the previous period. The price of ordinary mixed coal (a mixture of Shanxi fine coal and lump coal with a calorific value of 4,500 kcal) is 692.5 RMB/ton, a decrease of 3.8 RMB/ton or 0.5% compared to the previous period. The price of Shanxi Damian (a high-quality mixed coal with a calorific value of 5,000 kcal) is 797.5 RMB/ton, a decrease of 3.3 RMB/ton from the previous period, a decrease of 0.4%. The price of Shanxi Youmix (high-quality mixed coal with a calorific value of 5,500 kcal) is 907.5 RMB/ton, a decrease of 3.3 RMB/ton from the previous period, a decrease of 0.4%. The price of Datong blended coal (Datong produced blended coal with a calorific value of 5,800 kcal) is 957 RMB/ton, a decrease of 3.4 RMB/ton from the previous period, a decrease of 0.4%. The price of coking coal (main coking coal with sulfur content<1%) is 2,375.0 RMB/ton, which is the same as the previous period. From the above data, it can be seen that in early February, prices of anthracite and thermal coal continued to decline, but the decline narrowed compared to the previous period, and coking coal prices continued to remain stable.

SunSirs analysts believe that long-term cooperative shipping is the main focus in terms of origin. In terms of downstream ports, prices remained weak after rising last week. Power plants tend to adopt a wait-and-see attitude and purchase according to demand. Overall, it is expected that the price of thermal coal will remain stable, depending on downstream market demand.

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