Shenhua raised the price of coal water, the stable situation of thermal coal market was broken

Under the implementation of the overcapacity reduction policy, coal prices have finally seen a steady rise in the near future after a long period of decline
.
From 0:00 on June 1, China Shenhua Group (hereinafter referred to as Shenhua) began to implement the June waterway transportation of thermal coal (water coal) liquidation policy
.
Compared with the price in May, the price of coal under Shenhua's water has been generally increased, ranging from 10-19 yuan/ton
.
The latest price of Shen Hun No.
1 coal (5500 kcal) exceeded 400 yuan/ton for the first time this year, rising by 10 yuan to 402 yuan per ton
.
The coal type of coal 7-4800 kcal has the largest increase, reaching 19 yuan/ton
.
In addition to Shenhua, the other three of the "four major coal companies"-China Coal Energy Group, Datong Coal Mining Group, and Yitai Group will also see price increases in varying degrees
.
On the afternoon of May 27th, the China Coal Industry Association and the "four major coal companies" held a "4+1" meeting in Beijing.
The meeting decided that the coal price of the four major coal companies in June would increase by 10 yuan/ton compared to May
.
Affected by this, the Bohai Rim Thermal Coal Index, which has always been regarded as the weather vane of coal prices in the industry, has finally ended its stable straight line for more than two months
.
On June 1, the Bohai Rim Thermal Coal Price Index showed that the comprehensive average price of 5,500 kcal thermal coal closed at 390 yuan/ton, an increase of 1 yuan/ton from the previous month
.
An industry insider told Jiemian News that although the increase of 1 yuan was lower than market expectations, there was finally a loosening, which also brought hope for the subsequent breakthrough of the price of 400 yuan/ton
.
The last time the "big four coal companies" decided to raise prices collectively was on February 26
.
At the "4+1" meeting that day, it was decided to increase the price of coal water from the four major groups by 10 yuan/ton on the basis of February on the basis of each card number of the four major groups
.
The price has remained stable in April and May .
April-June is the traditional low season for coal demand each year, and coal prices usually fall, but this year is uncharacteristic
.
Many industry insiders told Jiemian News reporters that due to the current high enthusiasm for capacity reduction in various regions, the implementation of coal production restriction policies has caused a reduction in coal supply in the market.
In addition, the market expects that production restriction policies will become stricter and production capacity will further decline.
, This round of coal price rise is in line with market expectations
.
According to Deng Shun, an analyst at Anxunsi Coal, starting from mid-May, due to the market’s bullish price of coal at large mines in June, some northern port traders are already hoarding and reluctant to sell them, hoping to wait until the four major coal companies rise in June.
Shipment after the price
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Since the State Council issued the "Opinions on the Coal Industry's Opinions on Resolving Excessive Capacity and Realizing Difficulty Development" in February, policies on coal capacity reduction have been frequently issued recently
.
On May 18, the Ministry of Finance announced the "Administrative Measures for Special Reward and Subsidy Funds for the Structural Adjustment of Industrial Enterprises".
The central treasury will set up a special reward and subsidy fund of 100 billion yuan for local and central enterprises to resolve the steel and coal industries.
Excess production capacity will be subsidized
.
Stimulated by the subsidy policy, all localities have set higher overcapacity reduction targets
.
On May 26, the State Administration of Work Safety and other departments issued the "Notice on Promoting the Iron and Steel Coal Industry to Resolve Excess Capacity and Carrying out Safety Production Law Enforcement Special Actions", proposing that from May 2016 to the end of the year, the steel and coal industry safety Special action for production law enforcement
.
On May 27, the State Coal Mine Safety Supervision Bureau and other departments issued a notice again, re-determining the production capacity of 14 central enterprises and 210 coal mines directly under the Ministry of Justice, according to 276 working days per year, and released quantitative data.

.
This round of coal price rises are more from policy factors than from the improvement of downstream demand.
Whether coal prices can rise and rise as a result is still questioned by industry insiders
.
Deng Shun said that some people in the industry are cautious about the current port hoarding and reluctance to sell.
On the one hand, the stocks accumulated in the port will put pressure on coal prices in the future.
In addition, the downstream demand is currently limited.
If domestic coal prices rise, imports Coal will gain part of the domestic coal market share
.
"The key is whether the subsequent supply side can be suppressed.
In the past, coal companies suffered severe losses and everyone was willing to limit production.
Once the losses ease or make money, private coal mines will most likely become uncontrollable and increase production and increase supply.
End pressure
.
” Deng Shun said analytically
.
Zhongyu Information Market Analyst Guan Dali also holds a similar view.
When coal prices are high enough, the production capacity suppressed by the policy is about to move around.
Once the policy is loosened, this part of the production capacity will be released soon, and the cash situation of some companies is not optimistic.
The willingness to increase the price is relatively strong
.
"Controlling the increase in production capacity cannot make up for the cost burden brought about by production restrictions for the time being.
This unsustainable policy life needs time to test
.
" Guan Dali pointed out
.
According to statistics from the Statistics and Information Department of the China Coal Industry Association, from January to April 2016, 90 large coal companies produced 760 million tons of raw coal, a year-on-year decrease of 5.
6%
.
Among them, the total raw coal output of the top 10 enterprises is 460 million tons, accounting for 60.
7% of the raw coal output of large enterprises
.
However, from the data point of view, the inventory at the port and downstream has not changed much, and the downstream demand is not good
.
As of May 27, the total inventory of Qinhuangdao Port, Caofeidian Port, Jingtang Port, Tianjin Port and Huanghua Port was 14.
973 million tons, a month-on-month increase of 1.
81 million tons and a year-on-year decrease of 7.
81 million tons; the coal inventory of the six coastal power plants was 12.
696 million tons , A month-on-month increase of 1.
44 million tons, and the highest since the beginning of March, the number of days available for inventory is 22.
5 days
.