Qinhuangdao port coal prices rose and inventory fell for the sixth consecutive week. On April 18, the price of Shanxi's excellent mix closed up by 0.6% to 790 yuan/ton on a week-on-week basis; the price of coal in the southern suburbs of Datong increased by 1.0% from the previous week to 515 yuan/ton. We expect the increase in prices to stem from the decline in port inventory on the one hand, and on the other hand due to the increase in on-grid tariffs in some provinces and the improvement in the profitability of power plants.
We believe that higher international coal prices will support domestic coal prices; the room for rising domestic thermal coal prices will mainly depend on the profitability of the power plants. At present, 60% of domestic power plants are losing money. With the increase in on-grid tariffs by around 1 cent in some domestic provinces on April 10, the price of coal in Qinhuangdao port and the price in Tatung pit increased by RMB 5/ton. We expect that if the price of thermal coal goes up by 2%-3%, it will all swallow up the increase in on-grid tariff, and then the adjustment of on-grid tariff will lose significance. It is therefore expected that if there is no accidental bad weather, the price of thermal coal will rise less in the coming January.
Inventory continued to decline for the sixth consecutive week, falling by 7.8% to 5.9 million tons. At present, the traditional demand for thermal coal is in the off-season and the port inventory is rapidly declining. First, due to the maintenance of the Daqin Line, the supply of coal to the northern ports has been reduced. Second, due to the high international coal prices, the domestic coal import volume has decreased, forcing the southern coastal power plant. Increase coal purchases from northern ports.
The price of coke dropped, and coking coal prices stabilized. Linyi secondary metallurgical coke fell 1.7%. The average price of steel in major cities rose 0.8%; urban steel stocks fell 2.5% to 16.47 million tons. Due to the relatively modest growth in demand in the steel market, the short-term coking coal upside momentum is insufficient.
In March, raw coal imports reached 9.05 million tons, a year-on-year decrease of 41% and a month-on-month increase of 34%. Raw coal exports were 2.59 million tons (the highest value since January 2009), a year-on-year increase of 15% and a 47% increase from the previous quarter.
We believe that higher international coal prices will support domestic coal prices; the room for rising domestic thermal coal prices will mainly depend on the profitability of the power plants. At present, 60% of domestic power plants are losing money. With the increase in on-grid tariffs by around 1 cent in some domestic provinces on April 10, the price of coal in Qinhuangdao port and the price in Tatung pit increased by RMB 5/ton. We expect that if the price of thermal coal goes up by 2%-3%, it will all swallow up the increase in on-grid tariff, and then the adjustment of on-grid tariff will lose significance. It is therefore expected that if there is no accidental bad weather, the price of thermal coal will rise less in the coming January.
Inventory continued to decline for the sixth consecutive week, falling by 7.8% to 5.9 million tons. At present, the traditional demand for thermal coal is in the off-season and the port inventory is rapidly declining. First, due to the maintenance of the Daqin Line, the supply of coal to the northern ports has been reduced. Second, due to the high international coal prices, the domestic coal import volume has decreased, forcing the southern coastal power plant. Increase coal purchases from northern ports.
The price of coke dropped, and coking coal prices stabilized. Linyi secondary metallurgical coke fell 1.7%. The average price of steel in major cities rose 0.8%; urban steel stocks fell 2.5% to 16.47 million tons. Due to the relatively modest growth in demand in the steel market, the short-term coking coal upside momentum is insufficient.
In March, raw coal imports reached 9.05 million tons, a year-on-year decrease of 41% and a month-on-month increase of 34%. Raw coal exports were 2.59 million tons (the highest value since January 2009), a year-on-year increase of 15% and a 47% increase from the previous quarter.
Keco Technology Co., Ltd. , http://www.gdphoneparts.com