Heating season begins; balance between supply and demand in coal market

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In mid-October, the northern regions of China gradually enter the centralized heating season, leading to a rising demand for coal. As the demand for heating electricity in the downstream sector has not yet fully risen at this stage, major power plants have sufficient inventory from previous purchases, resulting in a balanced supply and demand situation in the coal market. As of October 19, the Ordos mixed coal price index stood at 360 points, remaining unchanged on a month-on-month basis. Based on the current pit prices, the prices of the 6 different grades have seen one increase and five stays the same; aside from the grade with the highest calorific value of 5500 kcal, whose price rose by 2 yuan per ton, the prices of the other coal grades remained unchanged compared to last week. Recently, the industry leader Shenhua raised the spot price of 5,500 kcal thermal coal; the price from October 16 to 22 was 668 yuan per ton, an increase of 23 yuan per ton compared to the beginning of the month. Meanwhile, the coal consumption of the six major coastal power plants has begun to decline, with an average daily level of less than 500,000 tons, and the available coal supply lasts for over 30 days. Furthermore, reporters learned that the completion of coal stockpiling this winter came about half a month earlier than last year, and the inventory levels at key power plants across the country are now approaching the highest levels seen last winter. Experts believe that with sufficient inventory in major power plants, it is difficult for large coal companies to drive up long-term contract prices in a way that can significantly boost coal prices; the supply and demand balance in the market remains favorable, and in the short term, coal prices are likely to experience only slight fluctuations. However, due to the influence of subsequent climate factors, demand for coal in the market will continue to rise, and an increase in coal prices may be inevitable.