Coal is China's most important basic energy, coal industry development is heavily influenced by the macroeconomic situation and the impact on the development of downstream industries, is a typical demand-led market. Over the past decade, the rapid growth of our national economy, infrastructure, real estate investment rapid expansion of the coal market by stimulating demand, the price turns up, through the "golden years." However, since May 2012, the coal market suddenly "fade", the price continued to fall, and has continued ever since. Data show that since late last year, coal prices fell more than 20%.
Potential demand worries
Chinese coal consumption is concentrated in the electricity, metallurgy, building materials, chemical, and other four industries, coal accounts for about 85% of total consumption. In recent years, the power industry coal consumption of coal is the most important part, an increasing amount of coal metallurgical industry, chemical industry and building materials industry, coal demand is relatively stable. 2013 1-4 month, the national power generation capacity 1.3264 trillion kwh, an average increase of 1.67%; crude steel production 257 million tons, an increase of 8.65%; cement production 639 million tons, an increase of 10.1%; ammonia production 18.61 million tons , an increase of 5.12%. Estimated total coal consumption was about four sectors of 10 million tons. Visible, in addition to power generation growth is low, the other three major industry output increased significantly, coal demand is still has good potential foundation. I believe that the slowdown in economic growth, economic restructuring process, the coal demand from the real economy still has a rigid support.
Steady decline in supply
Coal Supply and Marketing Association, according to the data, 1-April, the national coal production 1.16 billion tons, down 1.02%. From the main coal-producing province of view, in order to yield a slight increase or decrease based. Data show that 1-April Shanxi coal production 297 million tons, an increase of 0.23%; Shaanxi coal production 127 million tons, an increase of 0.65%; Inner Mongolia coal production 315 million tons, down 6.05 percent. This is the amount of coal transportation is also reflected. 1-4 months, the railway coal shipped 764 million tons, down 3.1%, which fell 7.2% in April; major ports shipped 209 million tons of coal, down 2%. Coal rail, sea, both the amount of negative growth, the decline in coal production proved reasonable. January-April imports, China imported 110 million tons of coal, an increase of 25.6%, net imports of about 107 million tons. Therefore, 1-April total coal supply about at 1.267 billion tons, the supply is relatively loose, with domestic coal demand basic adaptation.
Destocking accelerated decrease in coal prices
In the context of the basic balance between supply and demand, coal prices continued to fall, the industry chain related areas destocking may be in the process contributed to the severity. Data show that 1-May, focusing on power plant coal stocks continued to decline, the average daily stock of about 75.37 million tons of coal, down 8%, compared with last year's fourth quarter, down 17% or more. Meanwhile, the port coal stocks continued to decline, including Qinhuangdao coal stocks (domestic) has dropped to 5.66 million tons, representing a decrease of more than 15%. Therefore, to the inventory phase, thermal coal prices are subject to greater repression.
Industry destocking is caused by recent coal "bear" market is a key factor. In this process, the rapid growth of imports also indirectly weaken the coal industry the right to speak, in the fall in the price of coal has played a role in fueling. From the current coal power plant coal inventory available inventory and the number of days to see the coal industry destocking progress continues. If demand does not start, coal prices in the medium term is difficult to avoid.