Coal market performance polarization in December

In December, affected by the extreme cold weather in Central and Eastern Europe and the growth in demand in Asia, the international thermal coal market showed a “N” shock and overall performance was good. The short-term or sustained recovery, long-term global economic downturn pressure system, the prospect of rising fatigue is worrying . As for coking coal, Japan and Australia’s long-term price of 165 US dollars in the first quarter weakened market confidence, and the overall market consolidation fell. It is expected that the short-term international coking coal market will stabilize mainly due to the recovery of demand in the Asia Pacific region and the recovery of the downstream steel market. The possibility is not great.

Domestically, in December, the thermal coal market fluctuated in a weak and volatile manner. The inland thermal coal prices in the ports were loosened and the pressure was downward. The coal mine output may decline due to the cold weather, and the market outlook for the thermal coal market may continue to stabilise. If you fall into one another, the port may loosen slightly. Affected by the downstream coke boosting demand, the domestic coking coal market is generally stable, with coal prices slightly rising in some regions. It is expected that the downstream demand will further boost in the market, and the country proposes to control the total amount of coking coal and other scarce coals. With factors stimulating, coking coal will usher in a good start next year, and will maintain a slight upward trend in the short term.

In terms of coal shipping, the import volume continued to increase, the transaction volume was low, the overall performance of the coastal coal market was low, and the temperature dropped. At the end of the year, the power plant increased its procurement efforts. As a result, the performance of the whole month of the market was depressed first, and the freight rate fluctuated slightly. It is expected that the above-mentioned factors will continue to affect the coastal coal transportation market, and the late-term coastal coal freight rates will maintain a low level of shock.

I. International coal market 1. Thermal coal: demand improvement N-type consolidation is short-term or warmer for a long time Worrying In December, the international thermal coal market showed a “N” consolidation trend, affected by the extremely cold weather in Central and Eastern Europe and the recovery of Asian demand, thermal coal The demand has improved and the overall performance is better. As of December 21st, the thermal coal price index of Newcastle Port in Australia closed at US$93.69/ton, up by US$2.8/ton from the beginning of the month, with a monthly increase of 3.08%; the European ARA Three Coal Thermal Coal Price Index was US$90.54/ton, which was down from the beginning of the month. 2.43 US dollars / ton, the monthly decline of 2.61%; South Africa, Richard Coal thermal coal price index closed at 89.91 US dollars / ton, compared with the beginning of the month rose 0.04 US dollars / ton, a monthly increase of 0.04%.

On the whole, the international thermal coal market performed better in December due to the recovery of demand in Asia and the sudden drop in extreme cold weather temperatures in Central and Eastern Europe, which drove the demand for heating coal to rise sharply.

Since December, Central and Eastern European countries Poland, Serbia and Romania have experienced severe weather such as severe cold and heavy snowstorms. Affected by anomalous cyclones, most of Russia and Mongolia also suffered from rare cold currents. The extremely cold weather has caused these areas to be 7 to 15 degrees Celsius lower than the average temperature in previous years, and parts of the Far East and Siberia have temperatures as low as minus 40 degrees Celsius. The sudden drop in temperature caused a substantial increase in local coal for heating electricity consumption, driving up the demand for international thermal coal and increasing prices.

At the same time, coal imports in Asia have also increased significantly, driving up coal prices in Newcastle, Australia, and Richard Port, South Africa. China imported 28.89 million tons of coal in November, a substantial increase of 7.57 million tons from the previous month, an increase of 35.3% compared with the previous month, and a cumulative net import of coal of 245 million tons in 1-11 months, an increase of 34.9% over the same period of last year. It is estimated that the annual net import coal volume will reach 270 million tons, coal imports in 2013 will remain high; Japan's thermal coal for power generation in November also increased significantly by 25.5% to 9.766 million tons.

The European ARA Sangang thermal coal prices fell slightly, mainly due to the further decline in European crude oil, natural gas prices led to further decline in its gas costs, continue to squeeze coal demand, coupled with the US shale gas mining technology, a revolutionary breakthrough The lower coal consumption in the United States has prompted some of the U.S. thermal coal producers to shift to the European market, resulting in an oversupply of thermal coal in the European market. In particular, the continued growth in low-price coal exports from the United States and Colombia has suppressed the formation of coal prices.

It is understood that the negotiation of prices in Japan and Australia in the first quarter of 2013 is in progress, and the number of Japan-Korea thermal coal tenders has increased. Driven by the new year's purchase demand and the extremely cold weather, the international thermal coal market will continue to pick up in the short or continuous period. In the long run, the demand for thermal coal is closely related to the growth of the real economy. At present, the growth rate of the world economy has slowed down. Coupled with the long-term sustained government debt crisis in the Eurozone and the unfavorable factors such as the US “fiscal cliff”, the international thermal coal market is weak. The outlook is worrying.

2. Coking coal: Japan-Australia negotiations weakened market confidence in the short-term stability In December, the international coking coal market showed a slight downtrend, and the $165 US$1 coking coal coke price made most steel makers and traders look at the outlook of coking coal. Hollow state thick. At present, Australia's high-quality, low-volatile hard coking coal FOB is 158-159 US dollars / ton, although it fell by nearly 4 US dollars compared with the end of November, but it was driven by the demand of India's terminal companies to make up the library, which was higher than that in mid-December.

Australia-Japan-Korea-coking coal negotiation agreement is the benchmark for global coking coal prices. At the beginning of the month, BHP Billiton-Mitsubishi Alliance and Nippon Steel decided that the benchmark price for hard coking coal FOB contract in the first quarter of 2013 was US$165/ton, which was a US$5 decrease from the fourth quarter of 2012, which was different from the market’s expectation of a slight increase. To some extent, it reflects the weak downstream demand and the spread of pessimism in the market. Although the demand for coking coal rebounded sharply in response to the restocking of steel mills in the Asia-Pacific region, the long-term price of 165 US dollars in Japan and Australia in the first quarter severely affected the confidence of the market, casting a shadow over the outlook for coking coal. Subsequently, Anglo American and South Korea’s Pohang signed a long price agreement for the first quarter of 2013. The price of coking coal was US$165/ton, which was a decrease of US$5 compared to the fourth quarter of this year; the price of jet coal was US$124/ton, which was higher than this year. In the fourth quarter, the price dropped by 1 US dollar.

In the downstream area, the overall international steel market in December was oscillating and was slightly warmer. The European market oscillated upwards, but steel mills still seasonally cut production. Consolidation of the US market operation, the steel plant operating rate increased slightly. The majority of Asian markets rose, terminal demand has improved, and steel plant operating rates have remained stable. According to the report of Australia's Bureau of Resources, Energy and Economics (BREE), global steel consumption will soar by 4% in 2013 to 1.55 billion tons, and global crude steel production will increase by 3% to 1.59 billion tons, of which China's crude steel production will increase. 4% to 732 million tons.

Driven by the recovery of demand in the Asia-Pacific region and the recovery of the downstream steel market, the demand for international coking coal market will increase. In addition, China will implement total control of coal and other special and scarce coal categories and cancel coke export tariffs, or form certain international coking coal prices. With support, it is expected that the short-term international coking coal market will remain stable, and the possibility of a sharp drop will not be significant.

Second, the domestic coal market 1, thermal coal: long and short intertwined market downturn in the market after the market can not be optimistic In December, the domestic thermal coal market fluctuated weakly, the port of inland thermal coal prices have been loosened, pressure down. In terms of ports, the price of thermal coal in Bohai Bay was under pressure and oscillated. The monthly decline was RMB 6/tonne. In the inland areas, affected by heavy snow, coal production and transportation in the northern region were limited, thermal coal prices were loosened, and coal prices fell slightly in some regions. .

In the first half of December, the domestic mainstream coal market remained stable, and coal prices remained stable and declined. The economy will continue to stabilize and pick up, the hydropower output will continue to decline, the daily consumption of power plants will increase, and the high inventory level of power plants will gradually drop. At the same time, factors such as the high coal import operation and the resumption of the port inventory will continue to bring certain pressures to the coal price; mid-December, The domestic thermal coal market is generally weak and stable. Port stocks increased slightly, prices fell under pressure, northern production areas were affected by heavy snow, power coal transportation was hindered, open-pit mine production enthusiasm was also gradually affected, supporting the stability of thermal coal prices; in late December, the domestic thermal coal market was operating weakly. The overall trend is downward. Qingang stocks rose slightly, and coal prices were under pressure. Under the influence of heavy snow, the production and transportation of coal in the main production areas were limited, and the supply of thermal coal may have decreased slightly, and the coal price in some regions was slightly lowered.

In terms of ports, due to the increasing pressure of imported thermal coal and the uncertainty in the 2013 mid- to long-term coal price negotiations between coal and electricity, the continued cautious or sluggish market buying and selling atmosphere caused the continuous drop in thermal coal prices in Bohai Bay in December. The cumulative decline of 6 yuan / ton. Data show that in December the four ports of the Bohai Sea coal inventory increased from 16.495 million tons at the beginning of the month to 16.96 million tons, an increase of 1.465 million tons, an increase of 9.45%. As of December 25, the stocks of coal in the four ports around the Bohai Sea were 6.75 million tons of coal inventories at Qinhuangdao Port, 3.93 million tons of SDIC Caofeidian Port, 3.31 million tons of coal inventory in Jingtang Port, and Tianjin Port Coal. Inventory of 2.97 million tons.

In terms of origin, due to severe winter and snow conditions, production of northern coal mines is limited, especially in open-pit mining areas. In addition, in the aspect of transportation, heavy snow conditions have also greatly reduced the enthusiasm for shipping coal mines. For large mines, orders for coal and Shenhua will end. Tongji Coal Group: The number of coal contracts to be signed is 66 million tons. In 2012, the direct contract price of direct coal was RMB 546/ton, and in 2013, the price is expected to increase by RMB 15-20/ton. The power companies are required to sign the price at the beginning of the year; in 2012, the key contract price for coal under water is RMB 624.75/ton. It is proposed to lower 5-10 yuan/ton on the basis of the Bohai Rim price. At present, small households have already signed, and large power users have requested a reduction of RMB 20/ton. Shenhua Group completed a new production-transport-to-need connection scheme and is currently linking up with users in six regions including Beijing, Shanghai, Inner Mongolia, Guangzhou, Northeast, and Xinjiang. The sewer coal is signed according to the ratio of 7:3 in both the long-term contract and the market spot (70% in the long association and 30% in the spot); the price of the long association is 10 yuan/ton lower than the price in the Bohai Rim.

In the downstream, the inventory of major power plants is still operating at a high level, and daily consumption has once again declined slightly. As of December 21st, the total inventory of the six major power plants was 15.22 million tons, a decrease of 320,000 tons, a decrease of 1.6%, a daily total of 680,000 tons, a reduction of 20,000 tons compared to the previous month, and the number of days for coal stocks was 22.3 days. Recently, the “Notice of the National Development and Reform Commission on Cancelling Interim Measures for Temporary Coal Prices for Power Generating Electricity” and “Guidelines for Deepening the Reform of Power Coal Marketization by the General Office of the State Council” have been issued successively. Power companies are cautious in purchasing coal, and the demand is low leading to power plants. Inventory continues to rise. Currently, the power groups are currently signing 2013 mid-to-long term contracts with large mines.

Looking at the market outlook, in January, the domestic thermal coal market will continue to show steady decline and mutual affection. The pits will be stable and the port will be loosened. Inland, the year is approaching, affected by cold weather and holiday factors, coal mine production may have declined, coupled with the current market conditions are light, coal production enthusiasm is weak. In terms of ports, the inventories of the northern ports will remain in a steady momentum, and the market may continue to decline slowly. With regard to the southern ports, due to the impact of imported coal at the end of the year after coming to Hong Kong, the deposits in Hong Kong will gradually recover. The internal and external trade coal will have mutual impact and the coal price may be loosened.

2. Coking coal: After the favorable downstream demand boosted, the market will continue to rise steadily. In December, the downstream coke boosted the demand. The domestic coking coal market generally stabilized, and coal prices rose slightly in some regions.

In early December, the domestic coking coal market remained stable, and the overall transaction was still good. In some regions, prices rose slightly. The purchase price of coking coal in downstream coking plants was increased, and the upstream resources were tight. Many positive factors will continue to support domestic coking coal prices. Smooth operation; In mid-December, due to the steady upward impact of coke prices, the domestic mainstream coking coal increased steadily and traded well. Some of the steel mills also increased coking coal purchase prices in response to the previous major mine price adjustment and coal source tension; in late December, The domestic coking coal market as a whole stabilized and was affected by the increase in the price of large coking coal mines in the previous period. Some steel mills' purchase prices and coal companies experienced compensatory growth, while sales in some regions were sluggish due to changes in coal quality.

From a regional point of view, the overall coking coal market in Shanxi Province is mainly stable. Affected by rain and snow, the operating rate of coal mines and coal washing plants in the Luliang region is low, coking coal transportation is limited, supply is tight, and supply of 1/3 coke in Linyi area is tightening, and demand is good. The coal washing plant's appearance price rose steadily by RMB 50/ton, and the short-term increase in coke price will support the stable operation of coking coal prices. Heilongjiang coking coal resources are generally tight. Affected by the previous mine disaster, local mines in the province are all shut down. The supply of market resources is dominated by large mines. Last week, Longco coal increased the coking coal prices again, and the refined coal prices rose by 25 in December. -70 yuan / ton, strategic users generally rose 80 yuan / ton; expected short-term northeast coking coal resources are still in a tight situation, coal prices or slightly higher. The coking coal market in southwestern Shandong is stable, with overall transactions slowing down from the previous period. The main coking coal of Feicheng Mining Co., Ltd. has experienced slow sales due to high volatiles in the near future. From the 18th onwards, quantitative preferential policies are implemented. The current factory cash tax-included factory cash Taxes are 1,210 yuan/ton, purchases of 5000, 10,000 tons are discounted by 20,40 yuan/ton. The coal coking coal market in Henan is operating smoothly, and the coking coal in Sanmenxia has risen by RMB 40/ton, with good transactions. Due to the tight resources and stronger willingness of downstream coking companies to purchase, the coking coal market in Yunnan continues to rise. Coal prices rose by RMB 20-50/ton, with good transactions. Short-term coking coal prices will continue to rise steadily.

In the downstream market, the domestic coke market is steadily moving upwards, among which the prices of certain special grade, first class, and quasi-primary metallurgical coke resources in Shanxi Province have been raised; the purchase prices of some steel mills in Tangshan and Chongqing have increased; in addition, the southwest region has received coking coal prices. Sustained increase in the promotion of coke prices rose again. In recent months, frequent rain and snow in the north, coke transportation is limited, some steel mills have less than 7 days of coke inventories, and the enthusiasm of steel purchasers has increased. However, due to the low price fluctuations in steel prices, especially the prices of building materials, the rising prices of coke prices still exist; For a period of time coke still has 30-50 yuan / ton gains.

Taken together, this year's Central Economic Work Conference emphasized that the construction of urbanization will be actively and steadily promoted next year. The demand for downstream steel and coke will improve, driving the coking coal market to further boost, and the country will propose total control of coking coal and other scarce coal categories. With all kinds of positive factors stimulating, it is expected that coking coal will usher in a good start next year and will maintain a slight upward trend in the short term.

3. Coastal coal freight rates: the shipping market first fluctuates, and then the market outlook fluctuates in a low level. In December, the coastal coal market freight index was announced in four phases. Import volume continued to increase, trading volume was low, and the overall performance of the coastal coal market was low and temperatures dropped. At the end of the year, the power plant has increased its purchasing power and other effects. The whole month will be restrained and then lifted in the full month, fluctuating slightly. As of December 28, the freight index closed at 1055.15 points, up 0.04% from the beginning of the month; the coastal coal freight index closed at 1150.72, up 0.5% from the beginning of the month.

Looking at the sub-routes, in December, the freight index of nine transport routes increased or decreased, among which seven routes generally maintained an upward trend, and two routes were in a downward trend. The route with the largest increase was the Tianjin-Zhenjiang route, which closed at 1201.34 points, up 1.67%. The route with the smallest increase was the Jingtang/Caofeidian-Ningbo route and closed at 1106.80 points, up 0.69%. The two routes dropped were Qinhuangdao-Guangzhou, which closed at 1042.28 points, fell 1.16% on the month, and Qinhuangdao-Fuzhou route, and closed at 844.46 points, down 0.16% on a monthly basis.

In the first half of December, the weakening of downstream demand, high port inventories, and the recovery of imported coal caused the domestic coal transportation market to suffer from pressure. Although the daily consumption of power plants has increased, it is still lower than the same period of last year. The available days for coal storage in key power plants in our country all exceeded 20 days, and the coal storage capacity of power plants in major consumer regions is also high. As the domestic coal price callback is expected to be stronger, the purchasing enthusiasm of coal mining companies is weak, and the increase in coal supply at the end of the year due to the arrival of the import coal contract leads to a corresponding increase in coastal coal supply. The coal trader’s enthusiasm for pulling coal cannot be boosted, and the market has a strong bearish atmosphere. The coal transportation market continued to slump.

In the second half of the month, as the economy stabilized and picked up, coupled with the continuous decline in temperature, the demand for electricity increased slightly, thermal power generation increased, and electricity consumption improved. Electricity and coal stocks of major power companies declined. At the end of the year, some coal traders were eager to complete sales tasks, clean up inventory, continue to cut prices, sell at a loss, resulting in an increase in the supply of goods in the transport market, and the coastal power plants also entered the last phase of coal procurement, with minor signs of recovery in coastal coal transportation. The transportation demand began to increase, and the maritime freight rate in the coastal coal transportation market rebounded slightly for two consecutive weeks. However, in South China, due to the impact of imported coal, which has continued to increase before the end of the year, the freight rates have been suppressed and the performance is still not stable enough.

Looking to the market, on the one hand, the current power plants actively purchase, and the coastal coal transportation market is picking up. In addition, the current freight rate is at historically low levels, and there is little room for further decline. On the other hand, the continued increase in imported coal and the coal price merger policy are announced. The transaction volume in the coal market remains low and the coastal coal transportation market is under pressure for a short period of time. It is expected that the coal freight rates in the coastal areas of China will maintain a low level of shock.