Lower coal prices or cancellation of dual-track opportunities

“Current coal reserves are at the highest level in history.” Many people in the industry interviewed by “China Energy News” reporters said that in the coal preparation phase prior to the peak coal use, the nation’s key power plants and coastal power plants had significantly lower coal deposits this year. Some people in the industry believe that the current high coal deposits at the power plant and the continuous decline in coal prices are a good time to cancel the dual-track coal price system.

Economic decline caused by high coal deposits in power plants At present, coal stocks in Hubei Province exceed 4.7 million tons, a record high and can meet the consumption of thermal power for more than 30 days. Another example is Guodian Group's power plant in Yantai, which has close to 200,000 tons of coal stocks. According to the daily coal consumption of 5,000 tons, the number of days available for electricity generation is about 40 days. Power plants in central China also began to store coal.

"Coal prices continue to decline. From April onwards, many power plants began to pump coal. Now the entire network of coal storage in Central China has reached 25 million tons, which has exceeded the number of days required by the government." Deputy Director, Market Price Finance Department, Central China Electric Power Supervision Bureau Shu Liping told the China Energy News reporter.

“Gansu Province has no problem in summer when electricity is at its peak because electricity and water make up for the power gap. The main problem for the power supply in Gansu Province is peak winter, and the number of days in winter is very tight. Due to the lower coal prices, companies in the province have begun to , coal storage for the winter." Gansu Provincial Electric Supervisory Office, a person who does not want to be named to the "China Energy News" reporter said.

The data show that since the beginning of May, the coal deposits at the Qinhuangdao port have increased rapidly and the inventory once exceeded 9 million tons. Not only Qinhuangdao, Caofeidian, Huanghua Port, even the Guangdong port, and power plants are full of coal. The national key coal coal storage days have exceeded 28 days, and some power plants have even increased to 50 days.

“The start of coal storage in power plants has long since started. Since March, it has been increasing. The national key power plant coal deposits should now be more than 90 million tons.” Li Ting, senior coal industry analyst, China National Circulation Productivity Promotion Center, accepts “China Energy Newspaper reporter said in an interview.

An industry insider told the “China Energy News” reporter: “The coal deposits of power plants are at a historically high level, which is a superficial phenomenon. The fundamental reason is the macroeconomic downturn.”

“The main reason is that the consumption has dropped. The power plant has been feeding coal normally, but it has consumed less coal and the stock has slowly accumulated. In addition to the economic downturn, the slow growth in power consumption, the rapid increase in hydropower output since April One of the main reasons for the increase in coal inventories,” Li Ting said.

Data show that from January to April 2012, the average annual utilization of thermal power equipment in the country was 1,705 hours, which was a decrease of 30 hours compared with the same period of last year and was lower than the average level of the same period of 10 years. Combined with abundant rainfall in the south of this year, hydropower generation in May increased by 31.0% year-on-year. Following this trend, the hydropower generation above designated size in July is expected to reach more than 90 billion kilowatt-hours, which can largely meet the seasonal increase in electricity consumption. The growth of thermal power output will be subject to certain restrictions.

Coal prices fell to create conditions for the integration In the last week of June, the average price of 5,500 kcal thermal coal in the Bohai Rim closed at 702 yuan/ton, down by 27 yuan/ton from the previous period. When will coal prices fall in the end?

"Coal prices should have fallen more or less." Li Ting told this reporter that the drop in coal prices in the market created conditions for the combination of the two. The authorities should seize the opportunity to promote marketization. At the same time when coal prices are fully marketed, the marketization of various links in the industrial chain such as the marketization of coal resources and the marketization of electricity should also be promoted simultaneously.

As we all know, at present, China's coal prices are still using a dual-track system, under the price control is divided into key coal prices and coal market coal prices. Under the pattern of tight coal supply, soaring coal prices, and imperfect electricity pricing mechanism, key coal contracts have greatly protected the interests of power generation companies. Under normal circumstances, the price of key coal is lower than that of market coal by RMB 200/ton, and the annual contract volume is about 1 billion tons.

“The two-track thermal coal price system will have a greater probability of cancellation in the future. At present, the thermal coal prices in domestic ports continue to decline. As of July 3, the 55% kilocalorie of Shanxi Qinhuangdao has an excellent price of 650 yuan/ton, which is a decrease of 18.75% compared to the beginning of the year. The highest point of last year has dropped by 24.42%. There is no sign of falling in the short term.” Wang Guang of Huabao Securities Research Institute believes that the price of national key coal power contracts is based on Shenhua. In 2012, Shenhua’s 5500 kcal contract coal sewer coal prices. At 600 yuan/ton, it is only 50 yuan/ton lower than the current market price. Before, under normal circumstances, the market coal price was 200 yuan/ton higher than the contract coal price, and the narrowing of the difference between the market coal and contract coal price became the National Development and Reform Commission. Reducing the intervention on coal prices has provided feasibility and necessity.

Li Qian, an analyst at Thermal Power Coal Co., Ltd., believes that although the price is close to the real benefit of the merger, the unilateral downside of the coal price is only an occasional market price. It is estimated that the country will not easily introduce measures.