Coal Market Trends in September

Raw coal production continues to grow rapidly Coal imports continue to operate at high levels

First of all, domestic raw coal production is expected to continue to grow rapidly. Since the beginning of this year, raw coal production in major producing areas such as Inner Mongolia and Shanxi Province has maintained a relatively rapid growth. With the continuous release of coal production capacity after resource integration, raw coal production growth has a good foundation.

The large-scale inspections of coal mine safety that have been carried out since late July have caused a certain impact on the coal market. Recently, the complaints of thermal power companies over high coal prices have once again ignited the media's enthusiasm, and some media have directly pointed the spearhead of coal-fired power losses to coal prices. At present, coal storage in winter is about to start in succession, and there is a possibility that coal prices will rise again. Under such circumstances, in order to quell coal-power contradictions and prevent coal prices from rising significantly, relevant departments should request coal production as soon as possible. And state-owned large-scale coal enterprises increase coal productivity and ensure stable supply of coal to stabilize coal market prices. Therefore, it is expected that the ongoing large-scale safety inspections in some areas may accelerate progress, and the coal production in major coal-producing areas will be less affected, and domestic raw coal production is expected to continue to grow rapidly.

Second, coal demand in the international market remains weak. In July, the imports of coal from Japan and South Korea, the two largest coal importers outside the Asia-Pacific region of the Asia-Pacific region, were only 14.3 million tons and 10.21 million tons, respectively, which was a decrease of 2.4 million tons and 1.6 million tons respectively over the same period of last year, which was a decrease of 14.3% and 13.6 respectively. %, both were basically the same as the imports in June. In addition, due to the slow economic growth in Europe and the United States and the weak economic outlook, the demand for coal in Europe and the United States is also weak. In the case of weak coal demand in the international market, the international oil price and the US dollar continued to fluctuate. In the short to medium term, there is little room for international coal prices to rise. Therefore, regardless of the supply of the international market, or from the price point of view, China's coal imports are expected to continue to maintain a high level.

While domestic raw coal production can maintain rapid growth and coal imports continue to maintain a relatively high level, the domestic coal market supply is generally sufficient.

Demand for steam coal falls seasonally Coking coal demand rises steadily There is a steady increase in demand for smoke-free lump coal

September thermal coal demand will experience seasonal decline

Judging from the situation in previous years, after entering September, due to the cooler weather, the electricity load on air-conditioning will decrease, and the electricity consumption of the entire society will decline significantly, and thermal power generation will tend to drop by about 8%. However, judging from this year's situation, the continued drought in the southwest region may cause the dry season to come ahead of schedule, and the hydropower output will continue to be blocked. At the same time, drought resistance may increase the power demand to a certain extent, thus slowing down the pace of thermal power down to a certain extent. In addition, the production of high energy-consuming products such as iron and steel continues to maintain a relatively rapid growth momentum, which may also slow down the decline in thermal power to some extent. On the whole, it is expected that the thermal power generation volume in September this year will fall by around 6%.

Coking coal demand is expected to rise steadily in September

On the one hand, with the passing of summer, building construction will usher in the golden season. Near the end of the year, automobile production is expected to rebound. The overall demand for steel products is expected to gradually rise. On the other hand, the recent purchase demand for raw materials from steel companies has increased significantly since July. In the month, the cumulative price increase for iron ore was close to 9%. Since August, the price of coke in some regions has also risen. The increase in the purchase of raw materials also means that the production of pig iron and crude steel may continue to pick up in the coming period. Overall, it is expected that pig iron and coke production will continue to rebound slightly in September, and demand for coking coal is expected to increase steadily.

The demand for smoke-free lump coal is basically stable

Although the export of urea has been lower than the same period of previous years since the implementation of off-season export tariffs, the situation of oversupply in the domestic market has been alleviated to some extent. In September and October of this year, urea exports still implement off-season export tariffs, and export volume is still expected to maintain a certain level. In addition, after entering September, some eastern wheat growing areas in the northern part of the country began to plant fertilizers for autumn, and the demand for domestic agricultural fertilizers is expected to increase. Affected by this, in September, the domestic ammonia and urea production will continue to decline, but it is unlikely to remain stable. The demand for smoke-free lump coal is also expected to remain basically stable.

The price of thermal coal and coking coal will continue to rise even higher

Thermal coal prices may rise steadily

At present, since the second half of August, thermal coal prices in the coastal areas have shown signs of stabilizing, while the price of coal pits in northern Shanxi has seen a slight rebound. After entering September, although the actual demand for thermal coal will decline as the weather turns cold, the successive start of winter storage coal and the maintenance of the Daqin Line will have a bullish effect on the market. It is expected that the thermal coal price will rise steadily.

Coking coal prices are expected to rise steadily

Benefiting from the continuous increase in demand for coking coal, due to tight resources in some regions, coking coal prices are expected to continue to rise steadily.

The price of anthracite lump coal is expected to remain high and run smoothly

Previously, I had expected that, due to the lack of demand, the price of anthracite lump in some regions in August may face some pressure for correction, but in August, the prices of anthracite lump coal kept stable in most regions. After entering September, due to the stabilization of demand, the pressure of anthracite coal price correction will also be greatly reduced. It is expected that the prices of anthracite lump coal will continue to remain stable at high levels.