The industry expects the coal price to fall in the peak season.

The 2019 National Coal Trade Fair is being held in Qinhuangdao. A week later, the China (Taiyuan) Coal Trading Center will hold the 2019 Coal Trading Conference. The holding of the two trade fairs marked the peak of the annual long-term negotiations between coal enterprises and downstream users.

According to the data released by the China Coal Industry Association, a number of coal companies have signed annual long-term contracts with the downstream. On December 5, 11 coal groups signed a medium- and long-term contract for 310 million tons of coal with user companies. Since the beginning of this year, large coal enterprises such as National Energy, China Coal, Yitai, and Shaanxi Coal have successively carried out medium- and long-term contract negotiations for three to five years with major power users. At present, the total amount of coal-fired contracts has exceeded 1.1 billion tons.

However, some coal-fired power companies have revealed that the negotiations are still being sawed due to the industry's general expectation that coal prices will fall during the peak season.

“A week before the National Coal Trading Conference, a large coal group in Shanxi organized an order fair in Shanghai. Because the contract price was too high, we did not sign it.” A large thermal power company official said that coal prices are higher this year. The level, coupled with the rising proportion of electricity market-based transactions and the decline in industrial and commercial electricity prices, is generally a large loss for thermal power companies, and the days are very difficult. Compared with the tight domestic coal supply in the previous two years, coal supply will be relatively loose next year, and the industry believes that there is still room for downside coal prices. Therefore, the power plant believes that there is still room for negotiation on the price and quantity of the long association.

"This year's long-term contract is really not as signed as last year, signing fast." The person in charge of a large coal enterprise in Shanxi said. At present, the annual long-term agreement signed by the company has a certain decline compared with the same period of last year. Other coal companies have similar feelings. The person in charge also believes that it is related to changes in the relationship between coal supply and demand. At the same time, the relevant state departments have paid more and more attention to the issue of contractual contract performance of the long-term contract, and the coal-fired power companies have also signed a long-term contract to be more cautious

According to the introduction of the downstream power companies, the current coal supply to the downstream users of coal enterprises is usually composed of three parts, namely, the annual long coal coal + monthly long coal + market coal. Compared with the monthly long coal market price, the annual long-term price is usually much cheaper per ton.

Coal prices have been at a high level this year, and coal companies have been unable to honor the long-term contract by reason of safety inspection and environmental inspection. However, coal prices are expected to move downward next year, and the proportion of coal companies' compliance with the long association is expected to increase.

Pan Hanxiang, a researcher at the Shanghai Coal Exchange, said that the current rising inventory in the downstream continues to suppress coal prices. While upstream advanced production capacity is accelerating production, the price trend has already formed in the context of a significant marginal increase in supply. Short-term market contradictions are still concentrated on the demand side. Under the dual-control requirements of energy, the seasonal demand performance this winter is obviously weak, and it has not reached the market expectation. In addition, the current implementation of the import coal restriction policy is far lower than previously expected. For the overall winter of the coal market this bearish.