Coal prices continue to rise for 14 weeks

“The coal stock days of major power generation companies have reached 18 days, and the enthusiasm for coal procurement has been significantly reduced.” Li Xuegang, deputy general manager of Qinhuangdao's seaborne coal trading market, said, “If measured in terms of reasonable days available for 15 days, the inventory of power companies is obviously high. It's up."

Correspondingly, coal prices that continued to rise for 14 weeks showed signs of adjustment in July, and the Bohai Rim thermal coal price index has dropped for three consecutive weeks.

Analysts said that the steady decline in thermal coal prices will become the main theme of the third quarter. The situation of the coal market in the fourth quarter depends on the performance of the macro economy, but it is difficult for coal prices to re-emerge in the fourth quarter of last year.

"The price has been exorbitantly high," Li Xuegang said in evaluating the 14-week rise in coal prices.

From March 16 to the end of May, market thermal coal prices continued to rise rapidly. The Bohai Rim thermal coal index reached 837 yuan/ton at the end of May, a cumulative increase of 70 yuan/ton, which was 41 yuan/ton higher than the 796 yuan/ton that was the highest point on November 23, 2010. Since then, it has increased by 6 yuan until June 22.

Li Xuegang believes that the rapid growth in demand for thermal power is the basis for the recovery of the domestic thermal coal market. "The investment of 4 trillion yuan in the short term will inevitably lead to the repeated construction of high-energy-consuming industries. These energy requirements began to gradually release at the end of last year. The economic start-up effect of the 12th Five-Year Plan has also shown itself in terms of electricity demand," he said.

According to Jie Juechen, general manager of the former Zhongneng Electric Fuel Co., the supply of electric coal was relatively stable in the first half of the year, but there was a local shortage of supply in a short period of time. In the second quarter, the supply situation improved, but the demand was significantly boosted.

A large amount of coal demand is related to this year's “electricity shortage”. Industry insiders believe that the shortage of electric coal has been exaggerated. "The lack of electricity is there, but the lack of electricity is not due to lack of coal." Li Xuegang said, "In the first 4 months of this year, the major coal-fired power plants of the country's major power generation companies were all in about 15 days, and the situation of coal shortage was exaggerated. The price went too far."

After domestic prices were raised, coal imports increased. "Although the amount of China's coal imports is not large, its impact on coastal thermal coal prices cannot be ignored." An analyst told the reporter.

Last year, China’s coal imports reached a record high, with annual imports of 164.83 million tons of coal, a year-on-year increase of 30.99%. However, after October of last year, spot coal prices in the international market continued to rise sharply, and domestic thermal coal prices reversed, resulting in gradual losses in coal imports.

"Imported coal is sold at the price of domestic trade, with a loss of about 150 yuan per ton," the industry source said.

As a result, the volume of imported coal in the period of February and March has sharply and dramatically contracted, which has increased the demand for domestic coal and boosted prices.