This week, the supply of coal from the main coal producing areas has remained stable, and the sluggish market demand for coal has not improved. Prices in the pithead market have remained stable with narrow fluctuations. Most coal mines maintain normal production and sales, and the market supply is stable. The demand for power plants has not yet been significantly released, and the transportation is mainly based on long-term contract fulfillment and essential procurement. The procurement demand of metallurgical, chemical, and civilian enterprises is still acceptable, but the enthusiasm of platforms and traders for shipping is poor; Large corporations have continuously lowered their purchase prices, coupled with road slippage and traffic restrictions in some areas affected by snowfall, resulting in a decrease in long-distance coal mining trucks and inventory accumulation in some coal mines. As a result, prices have been continuously reduced to reduce inventory.
Despite the arrival of cold air and a decrease in temperature, the daily consumption of power plants has slightly increased; However, the long-term agreement is actively fulfilling its obligations, with a continuous supply of imported coal and terminal power plant inventories operating at medium to high levels, resulting in weak demand for replenishment. Due to prolonged sea closures, the Bohai Rim ports are accelerating the construction of warehouses, increasing the pressure of port clearance. Weak demand and high inventory in coastal areas have led to loose quotes from traders and accelerated shipments. With the gradual heating in various regions, the heating capacity continues to grow rapidly, while the electricity generation and coal consumption continue to increase compared to the previous period. The amount of coal entering the plant has slightly decreased compared to the previous period, and the coal storage in power plants has slightly decreased from the previous high point. However, due to the continuous weakening of domestic coal prices and the prominent advantage of imported coal prices, some traders have continued to loosen their quotations, with a few accepting bargaining. There are also some traders who are looking forward to the later market situation and stop quoting, mainly observing and waiting. The overall market transaction volume of ports is scarce. This week, the port coal price fell by 7 yuan/ton.
The peak season for coal consumption has not yet arrived, coupled with staggered production in the cement industry, and the steel industry is facing enormous external pressure; However, high inventory and low demand will continue to constrain the release of thermal coal procurement, and the coal market demand will continue to remain at a low level. Under the normal implementation of the long-term agreement and the strong replenishment of imported coal, the destocking of ports and coastal power plants around the Bohai Sea is slow, and the pressure of oversupply in the market is increasing. Based on comprehensive analysis, coal prices in the port market will continue to be in a slow downward trend for the foreseeable future. It is expected that in mid December, under the pressure of high inventory and high imported coal, port coal prices will continue to decline and are expected to fall below this year's lowest record (on April 10th, coal prices were 813 yuan/ton).
In December, strong cold air will sweep across most parts of China with rain, snow, cooling, and strong winds. With the arrival of cold air, the support of seasonal consumption peak season may gradually emerge, and the coal inventory of the whole society is expected to enter the stage of depletion from the accumulation stage. Meanwhile, as coal prices continue to decline, sellers are shipping less coal to the market, railway traffic is decreasing, and buyers' willingness to purchase and bargain is expected to increase. Supported by marginal improvement factors, it is expected that the price of port thermal coal will stabilize and stop falling in late December.
