SunSirs: Strong Demand Meets Supply Constraints, China Thermal Coal Market Boosts

In terms of origin: Recently, the supply of coal from production areas has been continuously tight, with Yulin in Shaanxi and Ordos in Inner Mongolia becoming the focus. The rainstorm forced the open-pit mine to stop production in a large area, and the mine entered the maintenance period after the centralized completion of production tasks at the end of the month. The dual factors led to the rapid consumption of pit mouth inventory. Some coal mines in Shaanxi have further reduced their supply due to equipment reverse maintenance, while Ordos has experienced a wave of production shutdowns due to rainfall and meeting production and sales targets. Although most mining areas are maintaining production, coal transport vehicles are queuing up - essential users such as chemical plants and traders are competing to buy, driving coal prices up by 10-20 RMB/ton over the weekend so far. The mining company has reported that inventory has dropped to a medium low level, and traders have a strong bullish sentiment under high temperature weather. Short term prices are prone to rise but difficult to fall, and we need to pay attention to the impact of policy regulation in the future.

In terms of ports: The port market is in a delicate balance. The price of 5,500 kcal thermal coal at Qinhuangdao Port remains stable at 649 RMB/ton, while 5,000 kcal and 4,500 kcal coal are priced at 585 RMB and 520 RMB/ton, respectively. Undercurrent surging under calm surface: although rainstorm has led to the decline of railway transport volume and the acceleration of port inventory consumption (especially the shortage of low calorific value coal), the daily consumption of downstream power plants is low and the inventory is high, only sporadic bidding procurement. Traders are unwilling to lower prices due to cost support, while power plants resist high priced spot goods, resulting in a stalemate between buyers and sellers. Market participants predict that coal prices lack upward momentum and are unlikely to fall deeply in the short term, and the volatile pattern may continue. The future trend depends on the recovery of weather conditions in the production area and demand fluctuations caused by temperature changes.

In terms of imports: The imported coal market is quietly heating up. The rapid rise in domestic coal prices has prompted buyers to turn overseas. The offshore price of 3,800 kcal thermal coal in Indonesia has risen to $43/ton, and the surge in demand for short supply orders has led to a shortage of spot supply. Due to the issue of port congestion, the cost of transporting 5,500 kcal of Australian coal to shore has increased to 660-670 RMB, gradually weakening its cost-effectiveness advantage. Currently, South China power plants are actively purchasing low calorie Indonesian coal, but non electric enterprises are still cautious due to weak terminal demand. If domestic coal prices continue to rise, the attractiveness of imported coal prices may be further amplified, and the trend of procurement strategy differentiation may accelerate.

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