Source: Economic Daily
The continuous rise in coal prices has caused the once-silent "coal super madness" to strike again. On September 9, domestic coal futures prices hit a record high. Among them, the price of the main contract of thermal coal exceeded the mark of 1,000 yuan per ton for the first time, and coking coal and coke were not far behind, and the price of the main contract both came out of the record high.
Although the above prices dived collectively in the next day's intraday, the sharp rise and fall of coal prices still triggered a series of "butterfly effects", which affected the nerves of all parties. In the short term, coal prices continue to fluctuate at a high level, which is directly related to the changes in relevant indicators such as coal inventories and shipping costs, but in the long run, a key to affecting coal prices is the supply and demand relationship of the coal market.
Taking the "de-capacity" of the coal industry as an example, during the "13th Five-Year Plan" period, more than 5,500 coal mines have been withdrawn nationwide, and the backward coal production capacity has been eliminated for more than 1 billion tons /year. Although a large number of backward production capacity has withdrawn, the new advanced production capacity has not kept up in time. According to public data estimates, the new coal advanced production capacity this year is only more than 200 million tons.
Under normal circumstances, the gap in the domestic coal market will be supplemented by imported coal, but this year, the import coal market as a whole has been cold, and the market gap has expanded, for two reasons: first, the freight rate of the global shipping market continues to rise, resulting in the continuous rise in the landed price of imported coal; second, affected by international political and economic relations, the new crown pneumonia epidemic and other factors, Australian coal imports are restricted, Mongolian coal customs clearance is not smooth, and coal storage in major ports has declined rapidly.
The "Circular on Coal Economic Operation in the First Half of 2021" issued by the China Coal Industry Association confirms the above judgment. Data show that in the first half of this year, the national coal consumption was about 2.1 billion tons, an increase of 10.7% year-on-year. In the same period, the raw coal output of enterprises above designated size in the country was 1.95 billion tons, an increase of only 6.4% year-on-year. In addition, the total amount of coal stored in major ports across the country was 62.98 million tons, down 8.3% year-on-year.
From the perspective of the absolute price of coal, the current coal price in China has been at a high level since 2008, and relevant market players, traders, etc. generally have a "fear of heights", and downstream enterprises also feel huge cost pressure transmission. In response to the demands of all parties, the relevant departments have taken positive measures to help enterprises overcome difficulties, but in order to fundamentally solve the problem, the key is to use their brains to increase the supply of the coal market.
Since the second half of this year, the signal released by coal production capacity is very obvious, especially since August, 36 open-pit coal mines in Inner Mongolia alone have obtained land use approval, and it is expected that more high-quality coal production capacity will be launched after mid-September. Although the expectations of all parties for the policy regulation of the coal market have been increasing, the strange circle of "more regulation and control and higher price increase" in the coal industry for many years has still made many people wonder: can the coal price be stopped this year?
Realistically, the factors affecting the relationship between coal supply and demand are very complex, and it is indeed difficult to completely solve the imbalance problem in the short term, but it must not shake the determination and confidence of the national level to stabilize coal prices. From a national perspective, with the gradual release of coal production capacity, a significant increase in coal supply is expected, but the emergence of policy effects still needs a process.
On the one hand, it is necessary to continue to expand the supply of coal in a stable manner, and on the other hand, it is necessary to continue to strengthen the cooperation between coal and upstream and downstream industries, which is also an effective way to guide the smooth operation of the supply and demand market. Practice has proved that since the launch of the "coal medium and long-term contract" system and the "base price + floating price" pricing mechanism in 2016, the development pattern of mutual benefit and win-win for the upstream and downstream industries of coal is gradually taking shape, and the acceptance of all parties in the market has been continuously improved. This model takes into account the interests of both supply and demand, helps to optimize resource allocation, stabilize the fundamentals of coal supply, and also helps to promote the coal industry to enhance its ability to resist risks and improve the level of high-quality development of the whole industry.
It should be pointed out that behind the current soaring coal prices, there is no shortage of malicious speculation and hoarding by some institutions or individuals, and the relevant departments should crack down on these violations of laws and regulations in a timely manner and effectively maintain market order. After all, any rational market cannot tolerate disorderly and irrational price increases. (Source of this article: Economic Daily Author: Gu Yang)