NEWS Center

27

2022

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05

The current development status and trend of the coal industry

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【Summary description】According to the official website of the National Development and Reform Commission, on February 24, the National Development and Reform Commission issued the Notice on Further Improving the Coal Market Price Formation Mechanism, which defined the reasonable range of the medium and long-term transaction price of coal (steam coal, the same below), among which the reasonable range of the price of water coal (5500 kcal) in Qinhuangdao Port is 570-770 yuan per ton, Shanxi, Shaanxi The reasonable price range for the mining process of Mengxi coal (5500 kcal) is 370-570 yuan, 320-520 yuan, and 260-460 yuan per ton, respectively. The reasonable price range for the mining process of Mengdong coal (3500 kcal) is 200-300 yuan per ton. The notice will be implemented from May 1st.

Current Development Status and Trends of the Coal Industry 2022

According to the official website of the National Development and Reform Commission, on February 24, the National Development and Reform Commission issued the Notice on Further Improving the Coal Market Price Formation Mechanism, which defined the reasonable range of the medium and long-term transaction price of coal (steam coal, the same below), among which the reasonable range of the price of water coal (5500 kcal) in Qinhuangdao Port is 570-770 yuan per ton, Shanxi, Shaanxi The reasonable price range for the mining process of Mengxi coal (5500 kcal) is 370-570 yuan, 320-520 yuan, and 260-460 yuan per ton, respectively. The reasonable price range for the mining process of Mengdong coal (3500 kcal) is 200-300 yuan per ton. The notice will be implemented from May 1st.

On April 27, the National Bureau of Statistics reported that Zhu Hong, a senior statistician of the Industry Department of the National Bureau of Statistics, interpreted the profit data of industrial enterprises and said that the mining industry has strongly driven the profit growth of industrial enterprises. The effective promotion of energy supply guarantee measures has led to rapid growth in the production of energy products such as coal, coupled with factors such as international geopolitical conflicts, which have led to a significant increase in commodity prices and jointly driven a rapid increase in profits in related industries. In the first quarter, the profit of the mining industry increased by 1.48 times year-on-year, continuing the high growth trend since last year, with a growth rate of 15.8 percentage points faster than from January to February. Among them, the year-on-year growth of PPI in coal mining and mineral processing industry and oil and gas mining industry in March respectively expanded to 53.9% and 47.4%, driving the industrial profits in the first quarter up 1.89 times and 1.51 times respectively. The two industries together drove the profits of industrial enterprises above designated size up 12.1 percentage points in the first quarter.

The coal industry refers to an industry primarily focused on mining coal resources. It is one of the main sources of national energy and an important pillar of the national economy. The coal circulation industry in China has a large number of enterprises and a relatively small scale.

The demand for thermal coal in the off-season is basically balanced between supply and demand, and the coal performance in the second quarter is expected to increase significantly year-on-year. On the demand side, the current thermal coal market is mainly focused on supply guarantee and chemical procurement. Daily consumption of power plants is still low, and the demand market continues to be sluggish. Downstream inventory levels are still low. Currently, the willingness of terminal inventory replenishment is not sufficient under high prices. Under the guarantee of supply, the total national coal production in March reached 396 million tons, with a daily average production exceeding 12.77 million tons/day, setting a new historical high. Supply entered a short-term high level, with coal imports in March reaching 16.42 million tons, a year-on-year decrease of 39.9%.

The coal industry refers to an industry primarily focused on mining coal resources. It is one of the main sources of national energy and an important pillar of the national economy. At present, there are many enterprises in China's coal circulation industry, with a relatively small scale. At present, the country is vigorously promoting the integration of coal mining enterprises, and the coal circulation market will also tend to concentrate, which will gradually raise the market entry barriers for coal circulation enterprises, reduce the Lebensraum of small-scale coal circulation enterprises, and large-scale, cross regional circulation service providers will become the mainstream. China's coal industry will continue to maintain a vigorous development trend, and in a long period of time in the future, the development prospects of China's coal industry will be very broad.

The current basic national situation in China is that energy consumption is mainly based on coal. In 2021, coal consumption accounted for 56% of the total energy consumption, and coal-fired power generation accounted for 60% of the total power generation. In the context of carbon peak carbon neutrality, controlling coal consumption is the key direction to promote the green and low-carbon transformation of energy. At the same time, coal also bears an important responsibility to ensure China's energy security. To address the contradiction between reducing consumption and ensuring safety, it is necessary to give coal an objective and fair positioning, and embark on a green and low-carbon development path that is in line with China's national conditions.

The current development status and trend of the coal industry

Coal not only has the development conditions to adapt to changes in energy demand, but also has the ability to convert coal-fired power generation and coal to oil and gas into electricity and oil and gas. In the face of the current complex and ever-changing international situation, the role of coal as a "ballast stone" for energy security is more important and cannot be replaced in the short term. It is expected that coal consumption will remain at its peak during the 14th Five Year Plan period.

Recently, a large number of policies have been implemented to increase production and stabilize prices of coal, coupled with the temporary slowdown in demand for coal due to the pandemic. Coal industry researchers believe that the market is expected to operate smoothly.

Coal is the "ballast stone" of China's energy security. Only by reasonably increasing coal production and supply capacity, maintaining the safety bottom line, can we seek more sufficient, stable, and economic sources of imports in the global energy landscape, and gain a certain degree of initiative and discourse power in the international energy market.

The International Energy Agency currently predicts that global coal demand will continue to grow in 2022: global coal consumption is expected to increase by 2%, reaching a record level of slightly over 8 billion tons; Strong demand will remain high until at least 2024.

Transferred from (China Research Network)