Power coal lacks continuous upswing
The coal market continued to weaken as factors continued to increase in supply, stocks in ports and power plants were high, and demand did not exceed expectations. The thermal coal futures continued to be under pressure from mid-June. Among them, the recent month contract 1809 fell the most, from the highest 661.4 yuan / ton all the way to the lowest 572 yuan / ton, a drop of 13.52%. Given that coal supply is still sufficient, power plants and port stocks need to be further digested. We believe that Zheng coal lacks a basis for further surge in the short term and may return to a downward trend in the later period.
Affected by many factors such as policies, coal stocks in power plants and major northern ports except Tianjin are generally high. According to the data, as of August 3, the total inventory of thermal coal in Qinhuangdao Port, Caofeidian Port, Jingtang Port and Huanghua Port totaled 16.269 million tons, which was 5.519 million tons more than the same period of last year, which was the highest level since 2015; the six major power generation groups Coal stocks totaled 153.463 million tons, 3.19 million tons more than the same period last year, at the highest level in the same period since records. The high inventory of coal in power plants and ports indicates that the long association mechanism has played a positive role in replenishing power plant inventory, which also means that it will take some time to digest the current high inventory of power plants and ports.
In short, the coal supply has grown steadily, and the high inventory of superimposed power plants and northern ports has yet to be digested. The thermal coal market lacks the basis for further surges, and it is still possible to return to the downward trend in the later period.
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