SunSirs: Negative Factors, Pressure and Decline on China Thermal Coal Market

Price trend

1. Origin price

5,500k thermal coal from Jinbei and Ordos: The pithead price ranges from 470-410 RMB/ton, showing a continuous downward trend.

Daily decline: 5-10 RMB/ton;

Weekly decline: 20 RMB/ton.

2. Port prices

Spot price around Bohai Sea:

5,500k thermal coal: 626 RMB/ton;

5,000k thermal coal: 546 RMB/ton;

4,500k thermal coal: 479 RMB/ton.

Daily decline: 1-2 RMB/ton;

Weekly decline: 14-15 RMB/ton.

Market driven factors

1. Negative factors

High inventory pressure: The inventory of major ports around the Bohai Sea reached 32.12 million tons (a decrease of 950,000 tons or 2.9% from the month's high point), and buyer price pressure dominated the market.

Inverted imported coal: Although the price of imported coal has remained stable with some decline, it still lacks cost-effectiveness compared to domestic coal, which suppresses procurement demand.

2. Positive expectations

Seasonal coal reserve demand: Entering the "peak summer" coal reserve period, the demand for power plant replenishment is gradually released, supporting market confidence.

Inventory depletion signal: The marginal decline in port inventory (2.9% decrease) indicates that the supply and demand pattern may gradually improve.

Future prospects

Short term trend: The current price is still suppressed by high inventory, but the decline has gradually narrowed, and the market has entered a bottoming out stage. Mid term turning point: With the approaching peak of summer electricity consumption and the contraction of imported coal procurement (inverted suppression of imports), domestic coal demand is expected to rebound. It is expected that prices will stabilize from June and may experience a temporary rebound.

Risk Warning

Attention should be paid to the speed of port destocking, the impact of extreme weather on the pace of coal preparation, and the disturbance caused by the adjustment of import coal policies.

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