Coal market will continue to differentiate in the first half of the year

Since the end of last year, the domestic market for thermal coal and metallurgical coal has been different. Coastal thermal coal prices began to decline in November last year. From the current port and power plant inventory, there is a certain pressure on the rebound of thermal coal prices, while the power plant's ability to withstand coal prices is still limited, it will also lead to invisible thermal coal price policy. Red line". On the contrary, the prosperity of the metallurgical coal market is expected to continue to increase under the drive of the international market.

The latest phase of the Bohai Dynamic Coal Price Index released on March 2 by the thermal coal price pressure seaborne coal network shows that thermal coal prices have gradually stabilized after a high level correction. The comprehensive average price of thermal coal for the 5,500-kilowatt market for closed ports in the Bohai Rim region closed at 769 yuan/ton, which was the same as the previous week and was also the second consecutive week. Although prices have stabilized, industry insiders believe that it is very unlikely that steam coal prices will re-emerge sharply in the first half of the year.

The analysis of the seaborne coal network indicates that the market activity of thermal coal supply and demand in the Bohai Rim has remained relatively low recently. With the warming of the weather, coal consumption has entered the off-season. Some industrial enterprises in the coastal consumer regions have begun construction after the Spring Festival, and electricity and coal consumption are still in recovery. Qinhuangdao port inventory has reached 8 million tons of warning line, and the current power plant inventory remains high.

While the demand is slowing down, China still maintains a relatively high level of coal imports. According to data released by the General Administration of Customs, China imported 16.56 million tons of coal in January, an increase of 4.8% over the same period of the previous year. During the same period, 1.43 million tons of coal were exported. This means that China’s net import of coal was 15.13 million tons in January.

On the sales of thermal coal, Shenhua and China Coal have adjusted the pricing mechanism of market coal, and the price mechanism linked to the Bohai Bohai thermal coal price index has become more market-oriented. This has resulted in a certain amount of operating activities in coal circulation. Impact. However, due to the limited ability of the power system to withstand the increase in coal prices, thermal coal prices are unlikely to rise significantly.

However, the process of resource integration in each coal-producing province has limited impact on coal supply in the first half of the year. According to the survey conducted by Northeast Securities, in 2011, the provinces were more cautious in the approval of the new technical transformation output and the approval of newly started mines. Shanxi's integrated mine production capacity will not be released until 2012; Henan Province has the same mining conditions and small recoverable reserves, which has less impact on the country's coal supply.

Metallurgical coal continues to strengthen Compared with thermal coal, domestic metallurgical coal prices have recently risen locally due to the increase in international coking coal prices. Affected by the continuous flooding in Australia caused by large-scale floods, Australia’s coal exports have been blocked and international coal prices have risen steadily. Australia's benchmark coking coal price in the first quarter of 2011 was approximately US$225/ton, the second-highest level in history.

Not only that, BHP Billiton has informed major Japanese steelmakers that in April 2011, they will be pricing metallurgical coal on a monthly basis to replace quarterly pricing. Mu Wenxin, an analyst at Union Metals, believes that Japan and South Korea’s coking coal imports rely on imports for a long time to meet domestic needs, and frequent price changes after the price of coking coal is changed monthly will inevitably affect the rising production costs of Japanese and Korean steel companies.

Although China's metallurgical coal relies mainly on domestic self-sufficiency, it is difficult for international metallurgical coal prices to affect domestic prices through imports. However, in the case of sharply rising international market prices and strained resources, countries such as Japan and South Korea may turn to Chinese procurement, which will drive the export enthusiasm of domestic metallurgical coal companies. In addition, countries such as Japan and South Korea do not rule out the possibility of purchasing steel products directly due to lack of resources and rising costs. This will, to a certain extent, stimulate the production of domestic steel and further increase the demand for metallurgical coal.

Not only that, the relevant authorities will implement protective development of special and scarce coal types. It is reported that the National Energy Administration is organizing the national research on coking coal resources, and will combine the “Twelfth Five-Year Plan” for the development of the coal industry to determine the national coking coal resource development layout during the “12th Five-Year Plan” period. Analysts believe that this may make tight supply of high-quality metallurgical coal tighter in supply, and once its scarcity is recognized, resource prices will inevitably continue to grow.