Spot price of coal will continue to rise

In the near future, coal ** fluctuates more intensively. Under the spur of steel prices, the downward range of coal tar prices also exceeds 10%. However, the author believes that despite the adjustment of the price of coal coke **, but with good support, the spot company has a stronger mentality.

Restricted Production Policy, Coking Coal Supply Limited

Since May, major domestic mines have again raised their coking coal prices on the basis of April. Shanxi's mainstream coal companies increased their offer prices by 50 yuan/ton, and Shandong coal companies raised their offer prices by 30 yuan/ton. The prices of major coking coal production areas showed a general increase.

Since the beginning of this year, the supply of coking coal has been strained due to the implementation of the coal production capacity restriction policy. On March 30th, the Shanxi Provincial Government issued the “Urgent Notice on Strengthening the Safety, Production, and Compliance of Coal Mines in the Province,” and requested the reorganization and consolidation of coal mines under the ownership of the Big Five Coal Group Corporation to suspend production for rectification. According to past experience, these discontinued integrated mines will be resumed in early May. However, from the actual investigation, the acceptance of integrated production of complex mines has not been completed so far, indicating that the implementation of this shutdown policy is stricter than expected before the market.

In addition, the National Development and Reform Commission, the National Energy Administration, and the Coal Mine Safety Supervision Bureau jointly issued the “Notice on Further Regulating and Improving the Order of Coal Production and Operations”, specifying that all coal mines in the country should organize production according to the 276-day working day regulations, ie multiply the existing compliance capacity by 0.84. As a new compliance capacity. From the implementation of the major coking coal producing areas in Shanxi and Shandong, the 276-day working days performed well.

The coal production restriction policy is strictly enforced, coking coal supply is tight, and the industrial chain maintains a low inventory pattern. Coking coal inventory at the sample mill and coking plant can be displayed in days. At present, the inventory availability days is 12.89 days compared to 15.42 days in the same period of 2015. Insufficient coking coal stocks in the industrial chain provided support for coking coal prices.

The profit recovery time is short, and the enthusiasm of the coking plant is not high.

Compared to the previous year's low, the price of coke rose by RMB 360/ton, and the production profit of the coking plant also recovered from the loss of RMB 50/ton from the previous year to the profit of RMB 100 to RMB 150/ton. The production profits have improved and the increase in the operating rate of coking plants has been relatively limited. According to the latest data, the coking plant with a production capacity of 1 million to 2 million tons, the operating rate was 72%, a 4 percentage point increase from the previous year's low; the coking plant with a production capacity of 2 million tons or more, the operating rate was 80%. The year-on-year low rose by 6 percentage points.