The Policy Increases The Price Of Coal To A High Level, And May Become The Deadline For Price Reduction In July

? ? ? ? On June 26, the national development and Reform Commission stressed that there was no basis for a sharp rise in coal prices, and it was expected to see a significant decline in July; This statement directly suppressed market sentiment, and led to the synchronous decline of coal plate and coal futures market on June 28.

On June 28, the steam coal futures of the Zhengshang exchange fell by more than 7%, and the main contract price fell to 790.2 yuan / ton; Coking coal futures fell more than 4% to close at 1978.00 yuan / ton, down 3.77%.

In terms of A-share market, the overall coal sector fell sharply on June 28. Huaibei Mining (600985. SH), Haohua energy (601101. SH), Shanmei International (600546. SH) and other coal stocks closed down. Anyuan coal (600397. SH), Yanzhou coal (600188. SH) fell more than 6%.

At present, the demand is still strong, the safety inspection is not reduced, the stable supply and demand fundamentals are under pressure from the policy side, and the coal prices continue to be sorted out at a high level.

Policy factors led the market down

? ? ? On June 26, the relevant person in charge of the national development and Reform Commission said that so far, the development and Reform Commission, together with relevant parties, has made every effort to promote the increase of coal production and supply, promote the release of high-quality production capacity, arrange the release of coal reserves and strengthen the supervision of medium and long-term contract performance.

Although the coal market price has rebounded in recent years, it is mainly due to the rise of coal price in the market outside the medium and long-term contracts, with less trading volume; From the point of view of the reasons, this is mainly affected by the expected growth of energy demand during the summer and the shutdown of some coal mines.

This summer, the temperature rises and the economic situation continues to improve, and the demand for electricity continues to maintain a high growth rate. However, as the water supply in the early stage is not as good as that in previous years, the market expects that coal electricity consumption will still increase; In addition, due to a number of domestic safety accidents, safety inspection in many places led to production stoppage and production reduction in some areas, which also restricted the supply growth at the supply side.

The national development and Reform Commission pointed out that under the influence of multiple factors, individual coal traders took the opportunity to raise their prices, which helped to boost the market sentiment.

In the first quarter of this year, benefited from the rapid recovery of the domestic downstream market, the price of coal and related products increased simultaneously, and the performance of coal enterprises increased significantly.

According to the data released by China Coal Industry Association, in the first quarter of this year, the revenue of 4267 Coal Enterprises above Designated Size in China reached 562.11 billion yuan, up 29.6% year on year; The total profit (after subsidy) was 80.88 billion yuan, up 94.3% year on year.

In the first half of the year, the supply and demand of coal was tight, and the center of coal price also moved up synchronously. The overall price level was at the same relatively high level, which also brought about performance growth for coal companies. The performance growth of listed coal enterprises in the first half of the year was in line with market expectations.

On June 24, Meijin energy (000723. SZ) took the lead in announcing its semi annual performance forecast for 2021. The company's profit is expected to be 1.1-1.5 billion yuan in the first half of the year, with a year-on-year increase of 1617.52% - 2242.07%, benefiting from the high price operation of coal and coke and the full production of new projects.

The NDRC expects coal prices to fall in July

? ? ? Since November last year, coal prices began to rise slowly, and then fell slightly in January this year.

Since March this year, with the economic recovery, loose liquidity, supply and demand mismatch and other factors, the commodity market has opened an upward channel, and coal prices have also risen simultaneously; In terms of the domestic market, the economy is recovering rapidly, the market supply and demand are booming, and the coal price continues to fluctuate at a high level.

Since the middle of May this year, a number of regulatory authorities have made a strong voice to deter the market speculation atmosphere, and the bulk commodities started a rapid decline process. However, since the end of May, coal prices have rebounded again, climbing to a higher range in the same period of history.

On June 24, the main contract of steam coal rose by more than 860 yuan / ton, and coking coal reached 2070 yuan / ton; In the face of the coal price which has risen to a historical high, the fear of heights in the market has been brewing. The NDRC's prediction of a short-term low coal price has formed a "cooling" on the market.

According to the national development and Reform Commission, with the growth of hydropower and solar power generation in summer, as well as the increase of coal production and import, the contradiction between supply and demand of coal will also tend to ease. It is expected that coal prices will enter a downward channel in July, and prices will also drop significantly.

According to the national development and Reform Commission, the production of coal mines in the main coal producing areas will gradually resume. It is expected that the production level in the first ten days of June will be restored by the beginning of July, and some high-quality advanced production capacity with production potential will be gradually released in the second half of the year; In addition, according to the imported coal orders, July and August will be the peak of the arrival of imported coal, and the coal supply will be further effectively supplemented.

After entering the flood season, the inflow of water increases greatly, the hydropower output increases significantly, and the solar power generation in summer also grows rapidly, which will replace thermal power generation in large quantities and effectively reduce the coal demand for thermal power.

At present, the main factors affecting the price trend of steam coal are the changes in policies and fundamentals. After July, the production increase plan and implementation situation of the production area should be focused on.

Supply and demand fundamentals are still adjusting

At present, the situation of coal market supply tightening has not changed significantly.

Jenny, a power coal analyst with Shanghai Steel Union, told reporters of the 21st century economic report that due to the recent coal mine accidents and safety inspection, as well as the end of the month, some coal mines stopped production due to insufficient coal management tickets, resulting in a decline in coal production.

With the continuous improvement of the economic situation and the impact of summer temperature rise, the demand for downstream electricity continues to increase, the high consumption inventory status of power plants continues, and the demand of terminal replenishment inventory is still on; However, under the restriction of high coal price, the enthusiasm of power plant to replenish inventory is low.

Relevant people in the building materials industry told reporters of the 21st century economic report that at present, the traditional cement off-season has entered, and the overall cement price is going down. However, under the support of demand and cost, the cement clinker prices in East China and South China are relatively limited; At present, the demand for steam coal in many places is relatively stable, and the overall demand of cement industry is limited, so it is difficult to have a greater impact on the steam coal market.

Societe Generale Securities pointed out that the coal mine shutdown inspection work carried out in various regions is expected to last until the first ten days of July, and the coal supply will encounter periodic pressure again in a short period of time; In terms of demand, daily consumption of steam coal has returned to the seasonal normal level, but in the face of the coming summer electricity peak, the inventory is still insufficient, and the short-term coal price is expected to remain strong.

Wang Guoqing, director of Lange steel network iron research center, said that at present, the steel market has entered the off-season, but recently, steel production in Tangshan and Handan has been restricted again, and the demand for coke and coking coal has weakened; However, affected by the domestic environmental protection policy, some coke enterprises in Shandong, Shanxi and other places have limited their production, and the coke production in relevant regions has also been restrained.

At the same time, with the promotion of the safety production inspection of the coal industry by the regulatory authorities, the supply of coking coal is also showing a tight situation, driving the price of coke firm.

"Under the expectation of tight supply of coking coal and coke in the later period, although some regions of iron and steel enterprises have limited production, the purchasing enthusiasm of overall steel plants is still on the high side." Wang Guoqing said.

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