In the case of stable supply and demand, the impact of power coal storage on the price increases. In August, the average daily coal consumption decreased, while the production of Inner Mongolia and Shaanxi gradually recovered, and the power plant inventory was also at a high level. Therefore, the price of steam coal in late August dropped and adjusted, and the probability of decline increased.

Average daily coal consumption will decrease

From January to July, China’s power generation increased by 3.33% year-on-year, of which thermal power generation increased by 2.63%. From the monthly data, the average daily coal consumption of the six power generation groups increased significantly in March, especially from the middle of March. The month on month growth rate was 25% in March, 4.2% in April, 13.16% and 0.96% in May and June, respectively. In July, although the rainstorm affected the downstream construction progress, the average daily coal consumption remained at a high level. In August, with the end of large-scale rainfall in southern China and the recovery of downstream construction, it is expected that the average daily coal consumption of industrial enterprises will rise month on month in the middle and late August, while the civil power consumption is still at a high level. Recently, the electricity consumption in Tianjin, Jiangsu, Shanghai and other places has reached an all-time high. The average daily coal consumption in the middle and last ten days of August may be the highest in the year.

In addition, from the seasonal point of view, the peak of thermal power generation is from July to August every year, which is also the peak season of power coal consumption. According to the statistical data analysis of the past eight years, the thermal power generation in August was higher than that in July in six years, except for 2014 and 2017. In absolute terms, the average daily thermal power generation in August increased by 0.5% – 1% compared with that in July. Therefore, we speculate that the thermal power generation capacity in August this year is still rising compared with July, but the range is limited.

Coal supply is gradually restored

As one of the largest coal producing areas in China, Inner Mongolia has been looking back at coal mines for 20 years since the end of April. Since 2000, all coal mines in Inner Mongolia have been included in the inventory, including planning and approval, investment audit, resource allocation and environmental audit. In this case, the output of Inner Mongolia fell by 12.9% in May and 9.6% in June. It is expected that coal production will gradually recover from July to August.

Since the middle and late July, the tense situation of coal spot market supply has eased, especially recently, the mine mouth coal supply in Inner Mongolia has increased, the spot shipment is slightly under pressure, and the price is weakening. However, since the end of July in Yulin, Shaanxi Province, the overall sales have weakened, the inventory has accumulated and the coal price has been lowered.

On the other hand, import coal increased more than expected. In August, Qinhuangdao 5500 kcal steam coal price rose to 543 yuan / ton, Shanxi Youhun 5500 kcal steam coal price rose to 578 yuan / ton, which is already in the high price area of the guiding price. Once the price rises to 600 yuan / ton, it will touch the lower limit of the red range of coal price proposed in the memorandum on suppressing the abnormal fluctuation of coal market price, and the state will start to stabilize the abnormal fluctuation price Mechanism. Therefore, there is limited space for coal prices to rise further. In addition, 8.39 million tons of steam coal were imported in June, an increase of 2.42 million tons compared with 5.97 million tons in May. Although the import volume in July decreased by 20.6% year-on-year, it increased by 810000 tons on a month on month basis. This shows that when the price of domestic coal is high, the control on imported coal will be relaxed.

As of the middle of July, the electric coal inventory of the power plants of the national unified dispatching was about 140 million tons, an increase of 5.1 million tons compared with the end of June, which was the highest level in the history of summer, and the available days of inventory increased to 27 days. The inventory of national key power plants also rose to a high level of 86 million tons, and the available days remained above 22 days.

At the same time, port inventory is also increasing. Since the end of May, coal stocks in both southern and northern ports have been on the rise, indicating that consumption in the South has also declined with the increase of supply in the north. The purchase intention of downstream terminal is low, the actual transaction of coal in the market is cold, and traders have a strong wait-and-see mood, and the mainstream quotations rise first and then fall. The basis has dropped from more than 30 yuan per ton in mid July to about – 17 yuan / ton at present, significantly down.