China Coal Industry Association: Coal consumption maintained rapid growth in the first three quarters of the price fluctuations

Beijing, October 26 news On the 26th, the China Coal Industry Association announced the operation of the coal economy in the first three quarters of 2021. In the first three quarters, under the influence of multiple factors such as sustained and stable macroeconomic recovery, seasonal coal demand, and poor hydropower output, China's coal consumption maintained a relatively rapid growth trend. Under the premise of ensuring safety, the coal industry has gone all out to do a good job in increasing coal production, ensuring supply and price stability, steadily releasing high-quality coal production capacity, gradually improving coal production, and continuously narrowing the decline in coal imports。 In general, the coal market is tightly supplied and demand, and prices fluctuate at high levels.

(Figure from CFP)

Characteristics of coal market operation in the first three quarters

First, coal production is stable and increasing。

In the first three quarters, relevant parties solidly promoted the work of increasing coal production and ensuring supply。 Under the premise of ensuring safety, key coal enterprises have gone all out to tap potential and increase production; relevant departments have accelerated the handling of coal mine procedures and the verification of production capacity, and some high-quality coal production capacity with production potential has been released one after another。

In particular, since July, open-pit coal mines involving a production capacity of about 140 million tons / year in Inner Mongolia have obtained approval for continuous land use and began to resume production one after another; Inner Mongolia, Shanxi, Shaanxi, Ningxia, Xinjiang and other five provinces and regions have agreed to extend the joint trial operation time for coal mines in a state of suspension involving a production capacity of 43.5 million tons / year, and increase production and supply under the premise of ensuring safety.

In addition, the relevant departments have made every effort to promote the direct guarantee and full coverage of medium- and long-term coal contracts for power generation and heating enterprises, organize and coordinate the signing of medium- and long-term contracts for coal sources, ensure the need for coal for power generation and heating, and adhere to the bottom line of coal for people's livelihood。 With the accelerated release of coal mine production capacity in the main production areas, the effect of the policy of increasing coal production and supply has gradually emerged, and the national coal production situation has gradually improved. According to the National Bureau of Statistics, the cumulative raw coal output of enterprises above designated size in the country from January to September was 2.93 billion tons, an increase of 3.7% year-on-year; among them, the raw coal output of enterprises above designated size in the country in September was 330 million tons, down 0.9% year-on-year.

Second, the decline in coal imports continued to narrow。

Since the beginning of this year, in order to meet the demand for coal in the domestic market, China's coal imports from Indonesia, Russia, the United States and other countries have increased strongly, and the national coal imports have declined slightly year-on-year, and the decline has continued to narrow. According to customs data, from January to September, the country's cumulative imports of coal were 230 million tons, a year-on-year decrease of 9.03 million tons, down 3.6%, and the decline was 6.7 percentage points narrower than that of January to August; of which 32.88 million tons of coal were imported in September, an increase of 17.2% month-on-month and 76.1% year-on-year.

Third, coal consumption is strong, and the growth rate is gradually declining。

In the first three quarters, China's macro-economy continued to recover steadily, the total electricity consumption of the whole society increased by 12.9% year-on-year, the rapid growth of electricity demand, coupled with the poor output of hydropower, the first 9 months of thermal power generation increased by 11.9% year-on-year, the rapid growth of thermal coal demand, is the main force driving the growth of coal consumption.

Under the influence of measures such as carbon emission reduction, "double control of energy consumption" and restriction of the blind development of "two high" projects, the production intensity of steel, building materials and chemical industries has gradually declined, the output growth rate of pig iron, coke, cement and other related products has declined, and the coal consumption of steel and building materials industries has declined accordingly.

In general, China's coal consumption in the first three quarters grew rapidly year-on-year, and the growth rate gradually declined.

Fourth, the coal inventory of the whole society is low。

Since the beginning of this year, the supply and demand of China's coal market has been generally tight, and the coal inventory in all links is low. At the end of September, the national coal enterprises stored 48 million tons of coal, down 2.3% month-on-month and 25.0% year-on-year; the national coal reserves were about 800 million tons, down 18.4% month-on-month and 44.5% year-on-year, and the coal was available for about 13 days; the national major ports stored 52.34 million tons of coal, an increase of 0.2% month-on-month and 18.4% year-on-year. Among them, the main ports around the Bohai Sea stored 17.61 million tons of coal, an increase of 3.4% month-on-month and a year-on-year decrease of 10.5%.

Fifth, the coal market price is running at a high level。

Thermal coal long-term price fluctuations to the upside. In October, the medium- and long-term contract price of 5500 kcal of sewage thermal coal in Qinhuangdao Port was 754 yuan / ton, up 207 yuan / ton year-on-year, an increase of 37.8%. From January to October, the average medium- and long-term contract price of thermal coal was 630 yuan / ton, up 90 yuan / ton year-on-year, an increase of 16.6%.

The market price of thermal coal has risen sharply. On September 30, the mouth price of shanxi Datong 5500 kcal thermal coal pit was 1400 yuan / ton, up 490 yuan / ton, an increase of 53.8% over the end of August, and an increase of 990 yuan / ton, an increase of 241.5%.

The price of coking coal is generally stable. In September, the contract price of some grade 12 main coking coal in Luliang, Shanxi Province, was 1590 yuan / ton, unchanged from August, up 210 yuan / ton year-on-year, an increase of 15.2%.

The market price of coking coal has risen significantly. On September 28, the comprehensive price of CCTD Shanxi coking fertilizer refined coal was 4055 yuan / ton, up 685 yuan / ton, an increase of 20.3% over the end of August, and an increase of 2825 yuan / ton, an increase of 230%.

International coal prices rose sharply. Since the beginning of this year, the world's major economies have gradually recovered macroeconomically, international energy and coal demand is strong, while market supply is tight, and international coal prices have risen sharply. In September, the export guidance price of Indonesian thermal coal was 150.03 US dollars / ton, up 14.5% from August and up 203.6% year-on-year; on September 24, the Chinese cif price of hard coking coal at The Fengjing Mine in Australia was 436.00 US dollars / ton, up 60.6% from the end of August and up 203.8% year-on-year.

Sixth, the industry's fixed asset investment has grown steadily.

Since the beginning of this year, the growth rate of fixed asset investment in the coal industry has continued to decline. From January to August, the cumulative investment in fixed assets in coal mining and washing industry increased by 4.4% year-on-year, and the growth rate fell by 4.4 percentage points compared with January to July, of which private investment increased by 1.7% year-on-year.

Seventh, the efficiency of the industry has gradually recovered.

From January to August, the operating income of coal enterprises above designated size in china was 1,785.75 billion yuan, an increase of 39.3% year-on-year; the total profit was 329.03 billion yuan, an increase of 145.3% year-on-year. At the end of August, the accounts receivable of coal enterprises above designated size amounted to 385.92 billion yuan, an increase of 34.0% year-on-year。

The coal supply and demand situation this winter and next spring is predicted

First, the supply of coal will continue to grow.

The increase in coal production and supply will be accelerated。 From October 1 to 13, the average daily coal output of key coal enterprises was 6.93 million tons, an average daily increase of 4.5% over September, and the momentum of coal production and marketing in key enterprises was good, and the effect of increasing coal production and supply gradually appeared.

In the later stage, coal enterprises will accelerate the work of increasing coal production and supply, and make every effort to increase coal supply. Relevant departments will jointly promote the release of advanced production capacity in coal mines with production potential as soon as possible, and promote the stable production and production of coal mines in accordance with laws and regulations.

With the joint efforts of all parties concerned, it is expected that China's coal production will maintain growth. Relevant parties will continue to increase coal imports to meet the demand of key domestic users and people's livelihood coal, and the cumulative growth rate of coal imports in the country is expected to turn from negative to positive.

Second, the demand for coal will be relatively strong.

As the production and operation activities of enterprises continue to recover, China's macro economy is expected to maintain a stable recovery trend. All regions and departments will strengthen cross-cycle adjustment, strive to keep the economy running in a reasonable range, promote economic stability and improvement, and it is expected that China's energy demand and electricity consumption will maintain rapid growth, which will form a support for coal demand.

Third, coal supply and demand will be generally tight

On the whole, it is expected that during this winter and next spring, coal demand, especially coal demand for power generation and heating, will be relatively strong, coal supply is expected to maintain growth, coal supply and demand will be generally tight, and coal prices may fluctuate at a high level.

Relevant recommendations

Strengthen unity and cooperation to promote the high-quality development of the industry. It is recommended to give full play to the role of the association as a bridge, improve the communication and coordination mechanism within the industry, strengthen communication and coordination, strengthen industry self-discipline, strengthen industry coordination, give play to the exemplary role of large enterprises, jointly maintain a relatively stable development situation, create a good market atmosphere, safeguard the overall interests of the coal industry, and promote the high-quality development of the coal industry.

Go all out to do a good job in increasing coal production, ensuring supply and price stability。 It is recommended that enterprises adhere to the bottom line of compliance with the law, under the premise of ensuring safety, go all out to do a good job in increasing coal production, ensuring supply and price stability, scientifically arranging production plans, effectively releasing advanced production capacity, and striving to increase coal supply and improve coal supply security capabilities. Take the initiative to assume the social responsibility of ensuring the supply and price stability of coal, give full play to the role of "stabilizer" and "ballast stone" of medium- and long-term coal contracts, maintain the normal order of the market, fully promote the work related to the full coverage of the coal long-term contract for power generation and heating, adhere to the bottom line of coal used by people's livelihood, and ensure that the people are warm through the winter。

Adhere to and improve the medium- and long-term contract system, and strengthen the performance of contracts. It is recommended to adhere to and improve the medium- and long-term contract system for coal, give play to the pricing mechanism of "base price + floating price" for medium- and long-term coal contracts, prevent coal prices from fluctuating, and continuously consolidate the long-term and stable strategic cooperative relationship between production, transportation and demand. Strictly implement the requirements of medium- and long-term coal contracts, enhance the awareness of contract performance, consciously standardize contract performance behavior, strengthen the performance of medium- and long-term contracts, and ensure that the long-term contract redemption rate of coal for power generation and heating reaches 100% in the fourth quarter。

Strengthen monitoring and early warning of the coal market。 It is recommended to improve the coal market monitoring and early warning mechanism, strengthen market dynamic monitoring and analysis and judgment, and formulate an emergency plan for coal supply。 Deeply study the development trend and enterprise development path of the coal industry under the "double carbon" goal, rationally view the changes in supply and demand in the coal market, strengthen consultation communication and coordination linkage, and promote the smooth operation of the coal market。