Since April this year, domestic production and living conditions got rid of the impact of the epidemic and returned to normal, the overall price of steam coal futures has maintained a unilateral upward trend, with a relatively small range of correction in the middle. At present, the main 2101 contract price has reached 600 yuan / ton, which is on the high side compared with the same period in recent two years. Affected by the rapid resumption of work and production after the control of the domestic epidemic situation and a series of hedging policies, the average daily consumption level of key power plants since April this year is about 6% higher than that of the same period last year. Next, there will be a traditional peak demand in winter. We think that it is very likely that high demand and high price will coexist in this winter.

First of all, the supply increase brought about by supply guarantee may be limited due to the frequent occurrence of recent accidents. Due to the factors such as anti-corruption of Inner Mongolia coal mines and strict control of coal pipe tickets, the cumulative output of raw coal in China decreased slightly year on year from January to September, and the supply of producing areas continued to be tight. The price of steam coal rose rapidly in September, which attracted the attention of relevant departments. In addition, the upstream and downstream are about to enter the stage of winter storage and preparation. In October, the main production areas began to actively promote the work of ensuring supply, and the overall supply rose. Although in the process of ensuring supply and increasing production, the safety supervision of the main production areas has not been relaxed, but recently, serious coal mine safety accidents have occurred in Shaanxi and Shanxi. It can be predicted that after the occurrence of safety accidents in the production area, the safety supervision work in the production area may be further strengthened, and the coal mine tends to focus on ensuring safety at the end of the year, which will restrict the growth of production to a certain extent, and it is difficult for the supply guarantee work to bring about an obvious recovery of supply.

Secondly, the attitude of coal import control exceeded market expectations. Although the price of steam coal broke through 600 yuan / ton in September, the import policy will be relaxed appropriately after the coal price rises rapidly and enters the red range, so as to stabilize the fluctuation of coal price. However, the coal import control is still showing an increasingly strict trend. Since the beginning of this year, the year-on-year growth rate of coal import has continued to decline, and the cumulative import volume from January to October decreased by 8.3% year on year The sharp year-on-year contraction of export volume can be traced back to the trough period of global coal industry in 2015. Since late October, rumors of various import easing have been widely circulated in the market, but the trend of import tightening has not changed except for the release of part of the quota due to supply guarantee in Northeast China. According to the current import policy and the import volume in October, the total amount of coal import in China this year may be basically equivalent to that in 2018, and the supplementary role of imported resources to domestic supply is relatively limited.

Finally, the port inventory remained low and showed no signs of recovery. Due to the continuous tight supply of production areas and more profit in shipping this year, it was in the state of upside down for a long time. At the same time, the three derailment accidents of Daqin line also had a certain impact on the import of ports. The coal inventory of Bohai Rim port only accumulated significantly due to the stagnation of downstream demand during the most severe period of the epidemic situation. Most of the time, the inventory level was hovering on the low side for three years, At present, the coal inventory level of Bohai port has been close to the low level of four years. The coal inventory of jiangnei port also showed a similar trend. According to the data of coal lake, the coal inventory of jiangnei port has been in the downward channel since August. In the latest period, the coal inventory of jiangnei port 73 was 65.38 million tons, with a year-on-year decrease of 17.06 million tons, which was a new low level in recent three years.

Of course, in addition to the above supporting factors, we should also pay attention to the reality of high inventory at the power plant end. After the coal price rose rapidly in September due to the tight supply, the downstream power plants carried out inventory replenishment in advance in the off-season. As of October 15, the inventory of national key power plants has recovered to the high level in recent three years. The inventory has been at the level of one month ago. If combined with the situation of the number of anchor ships in Bohai Sea port and the coastal coal freight rate since the middle of October, it is expected that the inventory level of key power plants will continue to replenish in the past month and continue to be at a historical high. As the downstream power plants replenish the storage ahead of schedule in the off-season, to a certain extent, the demand for replenishment in peak season is overdrawn. Therefore, before the daily consumption of the downstream power plant is switched to the peak season mode and the inventory of the power plant is effectively removed, the price rise drive from the demand side is not sufficient, and the sustainability of the price rise is questionable.

Considering the current supply and demand factors of steam coal, we believe that although the current futures price has been at a high level, but as the downstream demand peak season is gradually approaching, the middle and upper stream factors such as frequent coal mine accidents, limited supply increment brought by import under the background of tight import and port coal inventory at a low level in recent three years have a negative impact on the price of steam coal With the formation of strong support, coal prices will remain relatively strong on the whole, but further breakthroughs in prices may have to wait until the demand turns to peak season mode and the high inventory of downstream power plants is effectively reduced. Therefore, it is expected that the main contract price of steam coal will mainly fluctuate at high level in the short term, and it is expected to usher in the high opportunity before breakthrough after the return of demand in peak season.