Australia has suffered its heaviest flood in 60 years. What is the impact of Australian coal "ready to move" in large coal-producing areas on domestic and foreign markets?

It is reported that parts of New South Wales in Australia have been declared a natural disaster due to heavy rains in recent days, which means that the Australian federal and state governments can use disaster relief funds to support the affected areas. Due to the heavy rainfall in the coastal areas of north-central New South Wales in recent days, the water level of the river has risen, and some residents in low-lying areas have been relocated one after another.

The Guardian says New South Wales will experience its worst flooding in nearly 60 years, forcing many residents to leave their homes. In the video, a house is washed away and floats down the Manning River.

New South Wales is an important coal producing area in Australia. Black coal extracted from large coal mines accounts for 2% of Australia's black coal output. China is the state's largest trading partner and the largest source of imports. Last week, both thermal coal and coking coal showed an upward trend. Among them, thermal coal rose more than 5% last Wednesday and more than 6% last week. Coking coal rose nearly 8% last week. Coke suddenly dived last Friday, the night market continued to decline, falling to lose the whole week's gains.

There is a high probability of an increase in the price of coal exported from Australia, which may indirectly affect the domestic market.

Wang Xiaonan, an analyst at Baocheng Futures, told Futures Daily that recently, continuous heavy rainfall has occurred in New South Wales and parts of New South Wales in Australia have declared a state of natural disasters, which is bound to affect the normal mining of coal. Prior to this, Australia's major floods affected its coal exports in 2011, driving up coal prices. Although there is still a certain gap between the affected areas and the central and southern parts of the main producing areas, the rising water level of the river and the increased security risks are bound to affect the work of coal mining.

It is worth noting that heavy rainfall is not only limited to the north-central coastal areas of New South Wales, the neighboring state of Queensland is also experiencing heavy rainfall. More than 95% of Australia's black coal resources are concentrated in New South Wales and Queensland, of which NSW's black coal reserves account for about 34% of the country's total, while Queensland's black coal reserves account for about 62% of the country's total. and most of them are open-pit mines. Most of the main coal producing areas are concentrated on the east coast of Australia, under the advantage of geographical location, it is also the largest seaborne coal export base, heavy rainfall will also increase the difficulty of port operations, resulting in a sharp decline in exports, further raising the price of Australian coal. " Wang Xiaonan said.

Tao Rui, an analyst at China Merchants Futures, believes that although the impact of the flood has not affected the main coal producing areas in New South Wales, it may have a certain impact on Newcastle ports and transportation from producing areas to ports, which may be more concentrated in power coal, while the impact on coking coal is relatively small. For China, due to quality problems, customs clearance of Australian coal has been blocked since October last year, so the flooding in New South Wales will hardly have a significant impact on the supply of coking coal and thermal coal. However, this natural disaster will still affect the short-term export of Australian thermal coal, thus supporting the international price of thermal coal. At present, high daily consumption and low inventory in India will push up the price of non-Australian thermal coal, which in turn will stimulate the upward trend of domestic thermal coal prices.

Jin Guoqiang, deputy director of the Zhongzhou Futures Research Institute, said that if heavy rainfall continues to cause floods, the floods will inundate coal mines, causing roads and ports to be closed, and coal cannot be transported outward. Even if coal is transported to the port, it is too wet to box and affect the transportation of coal abroad. At present, China's Australian coal is still prohibited from customs clearance, which has a limited impact on China, but it has a significant impact on other international coking coal buyers such as South Korea, Japan and other countries. superimposed recently, the industrial production of the international community has gradually recovered, and the demand for Australian coal continues to increase. International Australian coal trading prices may be stronger.

Why power coal coking coal and coke "go their separate ways"?

There was a rise in coke last week, which Tao Rui said was due to the continued absence of Australian coal and concerns about the gap in the supply of coking coal, especially low-sulfur main coke. Recently, the supply of Mongolian coal has been unexpectedly limited, which has raised concerns about rising structural tensions in low-sulfur main coke, resulting in a rapid rise in unilateral prices and monthly differences. The reason for the restriction was the news of the closure of the coal preparation plant at the port in the early stage, followed by the confirmation of the case of novel coronavirus at the OT Copper Mine in Mongolia, thus hindering transportation at the port. Recently, there are additional factors such as the closure of the Wuhai Coal preparation Plant in China and the stricter environmental protection of Shanxi coal mine safety supervision.

"from the perspective of thermal coal fundamentals, although the consumption off-season is approaching, weakening bullish expectations to a certain extent, but from its fundamentals, there are many positive factors. On the one hand, the electricity consumption of the whole society continues to maintain a high double-digit growth from January to February, and industrial demand shows strong resilience. April-May is the peak season of industrial production, and the demand is expected to be good. At the same time, since March, clean energy power generation has been less than expected, further increasing the pressure of thermal power peak regulation; on the other hand, the safety inspection in the main producing areas is relatively strong, and super-capacity production is strictly restricted. Inner Mongolia has stopped the sale of some minerals due to the shortage of coal tube tickets, and the restrictive effect of coal tube tickets may be further strengthened in the middle and second ten days of the month. In addition, the main coal transport channels will be centrally overhauled in April, and the inventory around the Bohai Port may appear an inflection point earlier than in previous years, once the intermediate inventory is difficult to base before the peak season, or increase the direct contradiction between supply and demand. " Wang Xiaonan said.

"the rise in thermal coal last week is more a reflection of the expected rise in demand in the context of rigid supply. The rigidity of supply, on the one hand, comes from the reduction of production in the mine after the end of the 'guaranteed supply', 'coal control tickets', etc., on the other hand, under the background of the internal and external price difference continues to hang upside down, the import volume continues to decline. The expected rise in demand, on the one hand, comes from confidence in the follow-up economy, and on the other hand, it comes from the expectation of replenishment contained in the low inventory of power plants. The price of thermal coal is rising rapidly under the influence of the above factors. The fall in coke last week was not sudden. It only reflects the reality of continuous coke storage, as well as the expectation that hot metal production is limited and coke oven production is put into operation in the future, and that supply and demand will continue to be loose in the end. As a result, futures did not rise further after giving near-flat prices during the week. At the same time, with the introduction of Tangshan year-round production limit documents, and the rapid decline, and finally give the long-term near-zero profit pricing. " Tao Rui said.

Jin Guoqiang believes that supply and demand is the main reason for the sudden drop in coke prices. Prior to this, Tangshan announced the production and emission reduction plan for steel enterprises from March 20 to December 31. The theoretical evaluation of the emission reduction plan by relevant institutions is expected to affect 106000 tons of hot metal per day from March 20 to June 30. Compared with the current situation, it is basically the same, affecting 92000 tons of hot metal per day from July 1 to December 31. In the whole year, the annual iron aquatic capacity will be affected by about 27.8 million tons, and according to the average operating rate of 80% after eliminating the phase-out capacity, it is estimated that the output of molten iron will be affected by about 22.23 million tons. This has a great impact on the coke demand, and the new production capacity is gradually put into production, and the coke supply is increased. At present, the main contradiction of coke lies in the duration of production restriction in downstream steel mills.

Can thermal coal and double coke continue to rise?

Looking to the future, Wang Xiaonan said that the expectation of tightening supply and demand of thermal coal continues to ferment in the market, and the price reflects the bullish expectation of the market and the rise of the center of gravity. The main contract price of thermal coal is strongly pulled up, the technical performance is on the strong side, and the short-term price or oscillation is on the strong side. However, the tightening of supply and the expected increase in downstream procurement demand have been realized in advance, and we need to be vigilant about the implementation of specific expectations in the later stage, and the risk is increasing in the upward process of futures prices.

Tao Rui said that before the early logic has not undergone a major change, that is, before Australia coal clearance, domestic mine overproduction, coking before the elimination of new capacity, coking coal, thermal coal will remain strong, coke will remain relatively weak. However, with the change of price, the current valuation of coke is not high, and the valuation of coking coal and thermal coal is not low. Therefore, the operation, need to be cautious, should not be radical operation.

Haitong futures analyst Wei Yaru said that at present, the supply of coking coal is relatively stable, and the downstream demand is gradually released after the early destocking. Due to the recent environmental inspection team stationed in Luliang, Shanxi, there is a phenomenon of limited production in some local coking enterprises. Coking coal procurement is more cautious, in the short term, coking coal or maintain oscillation, but do not rule out the possibility of rising with the black system as a whole. However, in the medium term, with the gradual release of procurement demand and the production capacity of the coking bank, the demand for coking coal is expected to pick up significantly after the phased elimination of coking coal inventory.

"compared with coking coal, coke is slightly less optimistic. In the early stage, due to the sharp rise in coke prices, the profit of the coking plant almost reached 1000 yuan. after the Spring Festival, due to the continuous accumulation of downstream steel, the imbalance of profits of steel coke enterprises, and the expectation that new production capacity was gradually put into operation, steel mills began to raise and reduce coke. As of March 21, the sixth round of coke lifting and lowering has basically landed on the ground. Although the price of coke has been reduced by 600 yuan per ton, the profit of coke enterprises is still about 500 yuan per ton. At present, coke start-up still fluctuates at a high level, and coke enterprise inventory has accumulated to varying degrees. Data show that as of March 19, the total coke inventory of independent coking plants is 761000 tons, which has increased for six consecutive weeks, while the total coke inventory of steel mills is 4.8993 million tons. It is in a higher position in the same period of history. On March 19, the Tangshan Air pollution Prevention and Control working Group issued a notice on submitting measures to limit production and emission reduction for iron and steel enterprises in the iron and steel industry. The notice requires the whole process of iron and steel enterprises in the city (except Shougang Qianan Iron and Steel, Shougang Jingtang Iron and Steel) to reduce emissions by 30%, 50%, from 00: 00 on March 20 to 2: 00 on December 31. The news has increased the downward pressure on coke. However, with the landing of the sixth round of coke prices, the recent mainstream coking plants have a strong resistance to the continuous decline in coke prices, so the future may open a game between steel and coke. " Wei Yaru said.

Jin Guoqiang said that short-term coal coke is still weak in the whole black industry chain, but the limited supply end of coking coal may be stronger than coke. At present, under the circumstances that the spot price of coke continues to decline and does not stop falling for the time being, the driver of the rebound of coke futures 2105 contract is weak and the rebound space is limited. But at present, the price spread of 5mur9 is already low, so it is necessary to be cautious in shorting 2105 contracts.