The arrival of a cold snap may change demand expectations Thermal coal prices stopped falling and rebounded

Under the influence of cold wave weather, the rapid drop in temperature in the north has led to a phased improvement in coal demand, and coal prices have ushered in bullish expectations
.
Public data shows that coal traders' quotations have stopped falling and rebounded
in recent days.
Last week (as of December 2), the market price of 5,500 kcal thermal coal in Qingang was 1,350 yuan / ton, an increase of 5.
47%
from the previous month.

Guosheng Securities Research Report believes that the economy continued to be stable and good in the fourth quarter, coupled with the frequent extreme weather this year, the "La Nina" event continued or led to low
temperatures this winter.
It is expected that the fourth quarter of this year may be the peak season
for coal consumption.

Ji Shaoqing, deputy director of the operation department of the China Coal Transportation and Marketing Association, said in an interview with the "Securities Daily" reporter: "Recently, with the price reduction of large groups, the prices of most coal mines at the mouth of the production area have been adjusted, and coupled with other factors, the downstream demand is not sustainable, and the current domestic coal mines are still mainly based on ensuring supply
.
" At the same time, it is now near the end of 2022, the upcoming Spring Festival factory holiday, the arrival of low-priced imported coal, and the higher downstream inventory than in previous years are all factors such as the downward price of
prices.
Recently, with the sharp cooling of the weather and the continuous adjustment of prices in the early stage, the shipments of some coal mines with large declines have improved, and prices have also shown a slight correction, but from the current point of view, this adjustment has some lack
of stamina.
”

Cold wave drives coal demand up, and policies have increased efforts to ensure supply

Looking back at November, coal prices fell under pressure in early half of the year due to a year-on-year increase in global temperatures and weaker-than-expected demand
.

Data released by the National Bureau of Statistics on November 24 showed that compared with early November, the prices of all coal types in the country fell in mid-November, and the decline in thermal coal prices expanded
significantly.
The price of Shanxi mixed (calorific value 5000 kcal) was 1282.
9 yuan / ton, down 5.
4% year-on-year; The price of Shanxi Youmix (calorific value 5500 kcal) was 1482.
9 yuan / ton, down 4.
7%
year-on-year.

According to the data monitoring of the coal search network, as of November 28, the production area of 5500k coal fell by 230 yuan / ton in a week, and the port 5000k coal fell by 100 yuan / ton
in a week.

The research report released by Meierya Futures mentioned that since late October, subject to weak downstream demand, port and origin prices have seen a wave of sharp declines, of which the closing price of 5500 kcal thermal coal in Qinhuangdao has directly dropped from about 1600 yuan / ton to less than
1300 yuan / ton.

Recently, coal port prices have recovered
slightly after November 29 as the cold snap hit and the demand for coal increased as the heating season in the north increased.
On November 30, the main force of thermal coal in the domestic futures market rose 9.
99% to close at 988.
8 yuan / ton
.
On December 2, thermal coal futures closed at 988.
6 yuan / ton
.

According to the analysis of Kaiyuan Securities in the research report, the overseas energy crisis is still severe, Western European thermal coal imports in October rose 20.
6% year-on-year, up 34% month-on-month, and Europe may still increase coal and natural gas purchases in winter, which will pose a greater challenge to China's imported coal; On the demand side, the country will fully enter the heating season in November, the daily consumption of thermal coal is expected to jump sharply, and the replenishment will continue
.

Coal is the "ballast stone" to ensure China's energy security, in the context of increasing demand, in order to ensure the stable supply of peak winter coal, China has increased policy to ensure supply
.
On November 30, the website of the National Development and Reform Commission said that it had set up a special class for capacity increase in conjunction with relevant members of the inter-ministerial coordination mechanism for coal, electricity, oil and gas transportation support, and urged coal-producing provinces and autonomous regions and central enterprises to tap potential and increase production, strengthen factor guarantee services, and coordinate and solve the difficulties and problems
in the process of coal capacity expansion and production.

The National Development and Reform Commission pointed out that the current coal supply situation is generally good
.
Since the full entry of the heating period, the supply of thermal coal in the national unified power plants has remained high, exceeding the consumption of thermal coal for many consecutive days, and the coal storage has remained at a historical high of about 175 million tons
.

Wang Shuai, an analyst at Huatai Securities, believes that "unless there is a cold winter with unexpected intensity and duration or serious production disturbances in production areas, there will be no rapid and substantial decline in coal stocks in the whole society during the peak winter this year
.
" ”

Coal price rebound is limited, and overall is expected to remain high

Although the peak demand season is about to enter the peak winter, experts and institutions believe that the price of thermal coal in the future market does not have the conditions for
a sharp increase.

Wu Wanying, a senior researcher at the Tianyi Digital Economy Think Tank, told the Securities Daily reporter: "The cold wave hit, the demand for heating coal rose, and the enthusiasm for shipments was improved, which will be conducive to the recovery of thermal coal prices
.
" However, the current demand recovery is unstable, there is no significant expansion expectation in the next step, the supply and demand pattern is still loose, coupled with the restraining effect of winter supply and price stability, it is expected that the price rebound will be limited
.
In addition, the coastal coal market is still dominated by medium- and long-term contracts, and the proportion of market supply is low, considering that the price agreed in medium- and long-term contracts is relatively stable, and the price of thermal coal market is less likely to fluctuate sharply
.
”

In the view of the person in charge of energy in Jizhong, a listed coal enterprise, "In the fourth quarter, with the advent of the heating season, the coal market will show a state of high demand, high supply and high inventory, and the coal market as a whole is expected to maintain a high level, and thermal coal will continue to operate
at a high level driven by winter heating.
" On the demand side, the coal market is still rigidly supported, whether the macroeconomy can pick up remains to be seen, and the demand growth rate is likely to shrink.

Under the policy of increasing production and guaranteeing supply, the supply of thermal coal will continue to increase significantly, and the price will approach the guaranteed supply price under the condition of enhanced supply capacity, and the gap between the market price and the guaranteed supply price is expected to narrow.

(Reporter Zhang Xiaoyu)