The international coal market, which is already in short supply, once again ushered in major changes.
The EU's ban on Russian coal will come into effect on August 10. Since then, the EU will completely ban the import of coal from Russia, even though the European continent is currently facing a serious energy crisis.
This also means that all countries in the world will continue to scramble for coal internationally, and the international coal price may be at a high level.
Affected by this, on August 8, the coal sector performed well, and the coal ETF rose sharply. Shares of Yankuang energy and Shaanxi coal industry increased by more than 7%; On August 9, the coal sector continued to strengthen. As of the closing, Zhengzhou coal power rose by the limit, and Lanhua science and technology innovation and Jinkong coal industry rose by more than 6%.
In this regard, a securities analyst told the Securities Daily that the sharp rise of the coal sector was related to the imminent implementation of the above-mentioned ban, which intensified the expectation of overseas coal price rise.
Many insiders interviewed by Securities Daily said that due to the inverted price of imported coal, China's imported coal has been decreasing this year, but the domestic coal supply has been increasing, and the coal price is lower than the international coal price.
Overseas coal prices will continue to rise
On April 8, 2022, the EU officially approved the fifth round of sanctions against Russia, including the coal ban on Russia. The ban has a 120 day transition period and is expected to take effect on August 10.
According to the Research Report of Guotai Junan Securities, the essence of the EU coal ban is to reduce Europe's energy dependence on Russia, and force many European countries such as Germany and the Netherlands to restart coal power. After its formal implementation, it will have a maximum impact on the alternative demand of 2.5% of global coal consumption. At the same time, it is expected that the global coal price will continue to operate at a high level.
As the overseas energy game continues to escalate, the international coal price may continue to rise.
In the first half of the year, Russia was still the largest coal supplier in the EU. The EU imported 18.2 million tons of coal from Russia, an increase of 0.2%, accounting for 31.5% of the EU's total coal imports. The second source of coal imports is the United States, with an import volume of 11.2 million tons, up 91.6% year-on-year. The third largest supplier is Australia, with an import of 10.2 million tons of Australian coal in the first half of the year, up 17.6% year-on-year.
In this regard, Xue Dingcui, a coal analyst of the coal and coke Business Department of Shanghai Steel Union, told the Securities Daily that this move means that the EU will seek alternative resources from other countries (Australia, South Africa, Indonesia, etc.), or it will aggravate the shortage of maritime coal resources, thus driving the price of maritime coal to fluctuate upward. In the future, we need to pay attention to the pace of EU coal procurement.
It is worth mentioning that a report released by the International Energy Agency (IEA) on August 8 shows that global coal consumption will rise slightly in 2022, returning to the record level nearly 10 years ago. The EU's coal consumption will increase by 7% on the basis of a 14% increase in 2021.
In the power industry, coal is increasingly used to replace the natural gas in short supply. Affected by the escalation of geographical conflicts, the price of natural gas has risen sharply. Some EU countries are extending the life of coal-fired power plants planned to be closed, reopening closed power plants, or raising their operating time limit to reduce natural gas consumption.
In response, Yang Jie, a researcher of Yimei Research Institute, told the Securities Daily that judging from the current situation, the possibility of Russia cutting off gas to the European Union in the later period is increasing. If the cold wave occurs again in Europe, it will face the double pressure of energy products and power supply capacity, resulting in the rapid rise of international coal prices.
Domestic coal prices are generally stable
Affected by the rise of international coal prices, China's coal imports have decreased.
On August 8, the data released by the General Administration of Customs showed that in July 2022, China imported 23.523 million tons of coal, a year-on-year decrease of 22.05%; From January to July, a total of 138.522 million tons of coal were imported, a year-on-year decrease of 18.2%.
In this context, domestic coal supply has been increasing.
According to the data of the national energy administration, the coal mine capacity has increased by 78.9 million tons this year, and the raw coal output has increased by 11.0% year on year. By the end of June, the national unified dispatching power plant had 170 million tons of thermal coal, an increase of 51.7% year-on-year, and the available days reached 29 days, maintaining a high level.
It is worth mentioning that since the beginning of this year, the State Administration of mine safety has approved 147 coal mines with advanced production capacity and increased the production capacity by 180 million tons / year. Since September last year, a total of 490 million tons / year of coal production capacity has been increased.
Yang Jie believes that the EU's coal ban on Russia will weaken the supplementary effect of imported coal. However, this year, the confidence of domestic supply guarantee is relatively sufficient. The latest policy shows that the supply guarantee will continue until March 2023, and the target of new production capacity is 300 million tons. Therefore, it is expected that the impact on China will slow down.
Recently, Liu Tao, deputy director of the coal department of the national energy administration, said that since the beginning of this year, in the face of the severe and complex international energy situation and the greater pressure on domestic energy supply, the energy administration has firmly grasped the core task of ensuring the supply of power coal and gone all out to do a good job in ensuring the supply and price of coal. It has achieved good results of significantly increasing production, greatly increasing inventory, and generally stable prices, which are significantly lower than the international level.
The above securities analysts also told reporters that the domestic coal price is relatively weak, because the coal inventory is relatively high and the peak season of coal consumption is about to end. However, the rise in overseas coal prices will have a more positive impact on the overall coal prices.
