Recently, my country’s coal prices have fluctuated at a high level, and the work of ensuring supply and price stability has attracted widespread attention from the society. Is the supply of coal guaranteed? How to deal with the peak summer demand growth? How is the price trend in the later period? The reporter interviewed the relevant person in charge of the Economic Operation and Regulation Bureau of the National Development and Reform Commission on the 26th.
There is no basis for overall stable supply and price increases
Q: The State Council executive meeting held on May 19 will make arrangements to ensure stable supply of bulk commodities Coal prices have fallen, but they have rebounded recently. Is there a problem with the supply of thermal coal?
Answer: Since the beginning of this year, affected by factors such as the accelerated economic recovery, the coal market has seen both supply and demand boom, and prices fluctuated at high levels. In order to implement the spirit of the executive meeting of the State Council, the National Development and Reform Commission and relevant parties have adopted a number of measures to ensure supply and stabilize prices.
One is to make every effort to increase coal production and supply. Supervise the major coal-producing regions and key coal production enterprises in Shanxi, Shaanxi, and Mongolia to increase production and supply under the premise of ensuring safety in accordance with the principle of “one mine, one policy”, focusing on ensuring the coal needs of power plants.
The second is to promote the release of high-quality production capacity. For the construction of coal mines with advanced production capacity, speed up the procedures and promote the operation as soon as possible according to laws and regulations; actively support the nuclear increase of production capacity for qualified production coal mines with advanced production capacity.
The third is to arrange coal reserves. Part of the government coal reserves have been put on the market to effectively supplement market supply during periods of tight supply and demand. At the same time, key guarantees will be given to areas with low coal reserves in power plants. The next step will be to further increase the investment.
The fourth is to strengthen the supervision of the performance of medium and long-term contracts. Organize third-party credit agencies to conduct assessments on the performance of medium and long-term contracts, and urge both coal supply and demand parties to strictly implement medium and long-term contracts, improve the level of performance, and stabilize the basic coal supply.
Through joint efforts, the supply and demand of the coal market have undergone positive changes, with output increasing, prices falling, and inventory rebounding. Since the end of May, the average daily supply of thermal coal has increased by about 10% compared with the previous period. At present, the coal inventory of the national unified regulation power plants has increased by more than 2 million tons compared with the end of May. The price of thermal coal futures has fallen by more than 100 yuan/ton from the previous high. The price once dropped by about RMB 150/ton.
Recently, although coal market prices have shown signs of rebound, they are mainly in the medium and long term.Prices of coal in the market outside of the contract have risen, and the transaction volume is small. From the perspective of reasons, it is mainly affected by factors such as the expected increase in energy demand during the peak summer and the shutdown of some coal mines.
First, as the summer temperature rises and the economic situation continues to improve, the demand for electricity has maintained a relatively high growth rate. As the previous water inflow is less than in previous years, the market expects electricity coal Consumption will increase. Second, there have been a number of safety accidents across the country recently, and safety inspections are being carried out in various places. Some local coal mines have stopped production and reduced production. Individual coal traders took the opportunity to raise their quotations, which helped to increase the market’s bullish sentiment.
Comprehensive research and judgment, we believe that coal production and supply are generally stable, supply and demand are basically balanced, and there is no basis for a sharp increase in prices.
Energy supply is guaranteed during peak summer season
Q: As the peak summer season approaches, coal demand may increase, and the supply of thermal coal will be guaranteed What are the countermeasures?
Answer: According to preliminary research, energy supply and demand can maintain an overall balance during the peak summer period this year. For the upcoming summer peak, we have made arrangements in advance to continue to organize to increase production and supply, stabilize coal production, increase imports appropriately, strengthen coordination and scheduling, and ensure a stable supply of coal.
First, continue to strengthen the monitoring of power plant supply and consumption. Establish a daily dispatch mechanism, monitor the supply and consumption of key power plants across the country every day, track the supply of electricity and coal in a timely manner, and coordinate and solve the outstanding problems in the supply in the first time.
The second is to release reserves in a timely manner. A government dispatchable reserve capacity of 200 million tons will be built across the country, and about 100 million tons will be formed this year. The adjustment effect after the initial reserve release is very obvious. Recently, a batch of coal reserve resources have been organized, which will be released in a timely manner according to the supply and demand situation.
The third is to further increase the inventory of power plants. Pay close attention to power plants with low coal storage, guide major coal-producing provinces and coal production enterprises to help implement coal sources, coordinate railways to strengthen transportation capacity guarantees, implement point-to-point supply when necessary, and make every effort to increase coal storage levels.
The fourth is to improve the coordination guarantee mechanism. Further improve the emergency response plan, and improve the multi-party coordination mechanism composed of relevant departments, local governments, coal companies and transportation companies. In the event of a local period of tension, the emergency plan will be activated in time to ensure the normal operation of the power plant in terms of resources and capacity.
Since the 13th Five-Year Plan, the National Development and Reform Commission has actively promoted the accelerated withdrawal of inefficient, ineffective and backward production capacity, and at the same time has continuously released safe, efficient, high-quality advanced production capacity through reduction and replacement. At present, the output of large coal mines with an annual output of 1.2 million tons and above accounted for more than 80%, and the capacity utilization rate of in-production coal mines has increased to 80% to 90%. The supply capacity has been continuously enhanced, the degree of safety assurance has been continuously improved, and the supply flexibility and quality have been significantly improved.
Currently, the output of large-scale coal enterprises is increasing steadily. The coal supply of power plants nationwide is more than that of coal consumption, and coal storage is maintained at a reasonable level of about 20 days. Power plants in the eastern coastal areas store coal. Has reached the highest level in the same period in history. At the same time, since more than 80% of the coal used in power plants has signed medium and long-term contracts, the price is stable and railway transportation capacity is guaranteed. Therefore, the supply of thermal coal is completely guaranteed and will provide a reliable energy supply during the peak summer months.
Coal price is expected to enter a downward channel in July
Q: What is the future trend of coal price?
Answer: With the growth of hydropower and solar power generation in the summer, as well as the increase in coal production and imports, the contradiction between coal supply and demand will tend to ease. It is expected that coal prices will enter in July. With the downward channel, the price will drop significantly.
First, the output has further increased. The production of stopped coal mines in the main coal-producing areas will gradually resume production. It is expected that the production level in early June will be restored in early July, and some high-quality advanced production capacities with the potential to increase production will be gradually released in the second half of the year.
The second is the further increase in imports. According to the situation of imported coal orders, July and August will be the peak period for the arrival of imported coal, and coal supply will be further effectively supplemented.
The third is the increase in hydropower and solar power generation. After entering the flood season, the incoming water has increased significantly, and the output of hydropower has increased significantly. At the same time, solar power generation has also grown rapidly in summer, which will replace thermal power generation in a large amount and effectively reduce the demand for coal for thermal power.
(The original title is “Multi-Measures to Ensure Coal Supply During Peak Summer-Interview with Relevant Persons in charge of National Development and Reform Commission on Coal Supply and Stabilization”)