Signs of a reversal are emerging, and coal prices may bottom out

Mondo Finance Updated on 2024-01-19

Recently, coal mine safety accidents have occurred frequently, which has boosted the market's confidence in the market. However, in the case of weak non-electricity demand and wait-and-see electricity demand, coal **showed a slight **. In the short term, coal prices continued to decline, mainly due to high inventories and the competitive advantage of imported coal**. Due to the abundance of stocks, the market has not been able to achieve the previous expectations.

At present, procurement is still dominated by users in urgent need, with limited demand support, and some coal mines have slightly lowered their prices to stimulate sales.

In the short term, the growth of residential electricity demand is not obvious. According to the Meteorological Observatory, in the next few days, under the influence of the weakening of the cold air force in China, the temperature in most areas will be higher than that of the same period in normal years, and it may be difficult for the civil electricity load to increase significantly. However, industrial electricity demand will continue to grow, especially on the non-electricity side, and the demand for coal in the chemical industry is relatively good, significantly higher than the same period in previous years.

With the arrival of December, we are heading into the coldest season of the year and the current meteorological conditions are also an important consideration. If the cooling persists and triggers a cold spell, the daily consumption of the power plant may increase dramatically, which in turn will increase the enthusiasm of terminal procurement. At the same time, the macroeconomic expectations are improving, the operational vitality of industrial enterprises is increasing, and the demand for coal in non-power industries such as chemical industries is also continuing to increase, which will further support the possibility of coal prices continuing to appear from mid-to-late December to early to mid-January.

Recently, although the daily consumption of coastal power plants is in a period of recovery, the overall destocking process is relatively slow. However, since this week, the number of ships pulling coal from Bohai Rim ports has increased, and the speed of destocking has begun to accelerate. In the first half of this week, the market was relatively deadlocked, with few new pallets, supply and demand remained balanced as a whole, and coal prices were slightly smaller; But starting this Thursday, with the increase in bidding and procurement of power plants, coal prices stopped falling and began to **.

Ports** also showed a trend of bottoming out. The effect of Caofeidian port is remarkable, and the inquiry of Beigang has increased, and the decline has stopped and begun. On the one hand, the inventory of Beigang began to deplete. Due to the reduction of closures, after Caofeidian notified the port of evacuation, the downstream hauling was positive, the ship situation was better than in the previous period, the inventory fell significantly, and the inventory in Beigang may continue to decrease next week.

On the other hand, the terminal coal consumption is relatively stable. The daily consumption of coastal power plants is relatively stable year-on-year, and the number of available days is slightly higher than in previous years, but the daily consumption of power plants is about to usher in rapid growth. Imported coal is relatively stable, and its advantages are limited compared with domestic coal. The bidding of power plants is active, but the winning bid price is upside down, and the market wait-and-see sentiment is strong. Overall, ** fluctuated up and down, and the market was deadlocked. **After falling to the downstream psychological price, the inquiry has improved, but **slightly**, the transaction atmosphere has weakened again. **On the one hand, the business remains optimistic about the follow-up power demand, and on the other hand, the current Beigang and terminal inventories are relatively sufficient. In terms of ports, Beigang began to go to the warehouse, but it was still higher than the same period last year

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