Recently, Zhengzhou coal has a strong trend, rising continuously and breaking through 580 points; the price of port steam coal has also increased slightly. The fundamental reason is that the supply side continues to shrink and transportation is hindered, and the upstream and downstream transmission is not smooth, which aggravates the mismatch between supply and demand.
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Strict investigation on main production area of coal mine
The recent illegal mining incidents in Qinghai open-pit mines have been further fermented, making the close down of open-pit mines expected to further increase; open-pit mines in Northern Shaanxi are also facing severe investigation, and some coal mines have been shut down. Since this year, coal mines in the main production areas have been under strict supervision? The policy of “looking back 20 years” is very strong, which has greatly restrained the overproduction of coal; the coal management ticket policy in Shaanxi is very strict, and the open-pit mining is significantly affected. Overall, since this year, domestic efforts to crack down on black coal and overproduction coal have increased. According to the data released by relevant institutions, the cumulative output of raw coal from January to July this year was 2.12 billion tons, a year-on-year decrease of 0.1%; in July, the output of raw coal fell further on a month on month basis to 320 million tons, a year-on-year decrease of 3.7% and a month on month decrease of 4.9%.
Import volume fell sharply
According to the data of the General Administration of customs, the coal import volume in August dropped sharply to 20.663 million tons, a decrease of 20.8% on a month on month basis, and a sharp drop of 37.3% year-on-year; the cumulative coal import volume from January to August was 221 million tons, with a slight increase of 0.2% year-on-year. The effect of import control policy is very obvious. Since May, imports have been regulated, and the import volume has dropped from a high level. This year, China’s coal import policy is still subject to horizontal control. If the level control is carried out according to the import scale of the whole year in 2017, the remaining quota from September to December is only 50.183 million tons, and that in a single month is only 12.546 million tons; if the level control is based on the import scale of the whole year in 2019, the remaining quota from September to December will be 78.917 million tons, and the single month will be 1.73 million tons. No matter what level control standard is adopted, the import volume in the remaining four months of this year will continue to fall sharply.
Transport capacity is difficult to recover in the short term
On August 17 and August 24, affected by the rainstorm, the Daqin Railway had two derailment accidents in a week. Since then, the speed and traffic volume of Daqin Railway have been reduced. Up to now, the capacity of Datong Qinhuangdao railway has not returned to normal. The daily traffic volume is about 1.1 million tons, which is about 15% lower than the normal traffic volume. As of the week ending September 6, the import volume of the four ports in the North was 9.948 million tons, a slight increase of 4.9% on a month on month basis, and a year-on-year decrease of 3.7%; the export volume of the four ports in the North was 10.783 million tons, up 0.5% month on month and 3% lower than the same period last year. Due to the limited transportation capacity, the amount of port transfer in is less than that of transfer out, which aggravates the decline of port inventory. In addition, the autumn inspection of Datong Qinhuangdao line will start soon, lasting about 20 days, which will continue to restrain the further recovery of transport capacity. It can be expected that the transport capacity will remain at a low level in September.
Demand or off-season is not weak
The power consumption of the secondary industry may reverse the weakness. From January to July, the total electricity consumption of the whole society reached 404 million kwh, a year-on-year decrease of 0.7%. Among them, the electricity consumption of the secondary industry decreased by 2.2% year-on-year, and that of urban and rural residents increased by 8%. In July, the power consumption of the whole society was 682.4 billion kwh, an increase of 2.3% year on year. Among them, the electricity consumption of urban and rural residents made a major contribution, with a year-on-year increase of 13.8%, and the electricity consumption of the secondary industry decreased by 0.7%.
From the end of March to the end of this year, the issuance scale of special bonds is RMB 428.8 billion, which is higher than that in the first half of March to the end of this year, which is obviously higher than that in the first half of this year. Second, large-scale construction of water conservancy and transportation will be supported by large-scale water conservancy projects. In addition to the development of infrastructure, the real estate market in September will also maintain strong resilience, and the demand for rush work in the second half of the year will remain strong. It can be predicted that the year-on-year growth rate of electricity consumption in the secondary industry will be relatively strong in the future.
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The marginal substitution of hydropower becomes weaker. In the third quarter, the whole country ushered in continuous rainfall. The South experienced the super long plum rainy season, and the rainfall reached a historical high level. Recently, the rainfall moved northward, and the continuous rainfall in the northern region cooled down. On the whole, the high temperature weather in July and August was not as high as in previous years, and the rainfall increased significantly, so the substitution of hydropower for thermal power was very obvious. In July, thermal power generation decreased by 0.7% year-on-year, and hydropower generation increased by 6.1% year-on-year. It is expected that hydropower will still be stronger than thermal power in August. In September, the precipitation dropped seasonally and the inflow and outflow of the Three Gorges Reservoir decreased significantly. Hydropower is still stronger than in previous years, but the substitution of thermal power will become weaker.
The power plant replenishment will start soon. In the middle and late September, the power plant ushered in seasonal replenishment cycle, thus boosting the price of steam coal. Since August, the storage of power coal in key power plants has declined rapidly. As of the week of September 2, the inventory of key power plants in China was 76.43 million tons, down 3.75 million tons on a month on month basis, and 5.54 million tons on a year-on-year basis, with a decrease rate of 6.8%.
Low port inventory
Due to the impact of transport capacity, port inventory has declined significantly in the near future. As of the week ending September 7, the coal inventory of the four northern ports (Qinhuangdao, Caofeidian, Huanghua port and Jingtang Port) was 11.6 million tons, with a month on month decrease of 720000 tons, a decrease of 5.8%, and a year-on-year decrease of 2.293 million tons or 16.5%. Recently, the port inventory has dropped to the low level in the same period of previous years, and the low inventory will increase the upward elasticity of price.
In short, steam coal supply will further tighten. In addition, the power plant replenishment will start soon, so the price of steam coal will remain strong in September, with the fluctuation range of 570-600 yuan / ton.
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