It is reported that coal prices have been rising since the beginning of this year and have risen significantly since the beginning of June after a brief correction in mid-May. Market participants generally believe that tighter safety regulations, growing demand and rising import costs are the main factors supporting the rise in coal prices this round.

"on the one hand, the demand for coal is strong, on the other hand, the overall coal supply situation is tight this year." Zeng Xiang, a senior black analyst at Yide Futures, told Futures Daily that in the first half of this year, China's economy continued to recover, industrial production was exuberant, and electricity demand continued to rise. According to the National Bureau of Statistics, China's raw coal increased by 8.8% from January to May compared with the same period last year, but thermal power generation from January to May increased by 16% compared with the same period last year. At the same time, inventories in all sectors are on the low side, which is very different from the situation in which inventories were pulled up before the peak season in previous years. Among them, the inventory of key ports is 16% lower than that of the same period last year, and the inventory of key power plants is 21% lower than that of the same period last year. The inventory value of key power plants is now even lower than the lowest level last year. In addition, investment in infrastructure construction has maintained rapid growth, and production in cement, chemical and other industries is also increasing, all of which have boosted the demand for coal.

Zeng Xiang believes that the current tight supply in the coal market is the result of many factors. First, the security checks in the main producing areas are frequent and environmental protection is frequent, which affects the output. Second, affected by the inverted investigation for 20 years, Inner Mongolia has been issuing coal pipe tickets strictly according to the approved production capacity, and the excess production capacity has not been released, so that after the end of the guaranteed supply at the end of February, the production capacity has dropped more obviously. Third, the price of imported coal is on the high side, the price advantage of imported coal is small, and even has been pegged upside down with domestic coal prices, so that the quantity of imported coal from April to May is on the low side. Fourth, the shortage of coal supply in 2020 leads to excessive consumption of social inventory, the base of intermediate and terminal inventory is low, and inventory continues to be on the low side. Fifth, the rising demand for high-use coal and electricity brought about by the overall rise in industrial products has aggravated the tight situation of coal supply.

However, some market participants believe that this round of rising coal prices has always shown a "priceless" state. Xu Dongkun, a Chinese coal market network, believes that high-priced coal seriously restricts downstream purchasing demand. A small number of high-priced transactions are dominated by cement and chemical users, while downstream power plants mostly maintain long Association coal transportation, but the willingness of the terminal to actively purchase coal in the market is actually weak.

"it is expected that this tight supply situation will be alleviated to some extent after mid-July." Zeng Xiang believes that, on the one hand, after the celebration of the 100th anniversary of the founding of the Party on July 1, security checks and environmental protection measures may return to normal. Some seriously affected coal mines will appropriately increase their production at that time. On the other hand, hydropower has entered the peak period, coupled with the power generation of the first units of Baihetan Hydropower Station, the second largest hydropower station. The proportion of thermal power will be reduced, which will slow down the demand for coal. In addition, a large amount of imported coal has been invited for tender since mid-May, and the current arrival in Hong Kong has greatly alleviated the current tight supply situation.

Looking ahead, Zeng Xiang advised investors to focus on two key issues: one is how much coal supply can be restored after mid-July, which will have a direct impact on later market supply; the other is whether there will be new changes in environmental protection and security policies.