SunSirs: Supply Tightens, Demand Weakens, China Thermal Coal Prices Remain Stable but Slightly Strong

As the Spring Festival approaches, the overall trend of the thermal coal market is characterized by stable production areas, weak upward support from ports, and high and inverted import prices. It is expected that in the short term, it will gradually transition to a fluctuating pattern of "weak supply and demand".

Price dynamics: Coal mines in the main production areas are actively adjusting prices, showing a mixed pattern of ups and downs. For example, Huineng No. 8 washed mixed coal has been reduced by 10 RMB/ton, and Erlintu lump coal has also been reduced; But the main production area index has risen, with the Yulin 5,800 kcal index rising 7 RMB to 596 RMB/ton per week. Supply side: Due to the approaching Spring Festival, some coal mines (such as Fugu Ruifeng and Haiwan coal mines) plan to shut down or have already closed, resulting in a tight balance and slight tightening of supply in the main production areas.

Demand side: The terminal has limited pre holiday stocking demand and generally accepts high prices.

Future outlook: The market is expected to remain strong in the short term, but with the deepening of the Spring Festival holiday, it is expected to enter a pattern of "weak supply and demand".

Port situation:

Price and inventory: Coal prices in northern ports are stable with a moderate to strong trend. The price of Qinhuangdao 5,500 large truck is quoted at 696 RMB/ton (week on week +5 RMB). The core support lies in the continuous decline of inventory, with Northern Port's inventory decreasing by 1.42 million tons to 23.06 million tons per week, resulting in a decrease in available supply of goods. Demand and Transportation:

The coastal freight rate index was briefly boosted by the cold wave, but then fell again.

Downstream procurement is mainly based on long-term contract coal, and the market coal transactions are deadlocked. The demand for non electricity industries is weakening as the Spring Festival approaches. Future outlook: Low inventory levels provide support, but lack strong demand drivers, and it is expected that price increases will be limited, with short-term fluctuations being the main trend.

Imported coal situation:

Price trend: Imported coal prices remain firm. The CCI import 3,800 kcal index was reported at $57/ton (up $1.8 per week), showing an inverted trend with domestic coal prices of the same value (about 3 RMB/ton).

Supply side: Mainly affected by Indonesian policies, the government plans to reduce coal production quotas, which may lead to the closure of some coal mines. We plan to implement export tariffs that can be traced back to January (with an estimated tax rate of 5% -8%). The above factors have intensified the expectation of tight foreign trade supply, driving up bidding prices.

Market demand: Domestic end-users have a low acceptance of high prices and generally purchase at lower prices, leading to increased resistance to restocking.

Future outlook: Against the backdrop of policy uncertainty and weakened domestic demand in Indonesia, the short-term import market will present a situation of "weak supply and demand".

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