Why Thermal Coal Prices Keeps Falling

SHANGHAI, Nov 26 (SMM) -The consumption of thermal coal has increased amid cold temperature. But the rebound room for thermal coal prices to is limited amid increasing supply. 

The policy on ensuring coal supply and keep prices stable has achieved fruits. The overall price of thermal coal stabilised and the thermal coal inventory at power plants has also increased significantly. With the further increase of thermal coal inventory at power plants in the later period, the demand for thermal coal will further weaken. On the other hand, the demand for thermal coal has been declining. The duration of cold weather is relatively short, in spite of frequency. Compared with the same period of normal years, the temperature has not changed much. According to the forecast of China Weather Network, the temperature in most parts of the country will be higher than normal in the next 20 days. The daily consumption of thermal coal is unlikely to continue to grow.

On the whole, the current thermal coal price is still at an absolute high level compared with the same period of normal years. In addition, the thermal coal market has not yet entered the peak season. With the gradual improvement of supply and demand fundamentals, the prices of thermal coal are declining.