Stable coal supply remains top priority in China
According to recent statistics from China National Coal Association, in the first half of this year, national coal output reached 1.77 billion tons, an increase of 12.7 percent compared with the same period in the previous year; the sale volume of coal was as high as 1.71 billion tons, an increase of 13.8 percent year-on-year. The reasons why demands for coal have increased in the domestic market in the first half of the years are: on the one hand, the national economy has been growing steadily, and demands of coal-consuming industries for coal have maintained a rapid growth; on the other hand, affected by the drought at the end of this spring and early summer, hydroelectric power supply has decreased and demands for coal in certain regions increased.
The supply of coal results in rapid increase of national coal transportation. According to statistics, in the first half of the year, 1.11 billion tons of coal was transported by rail, a year-on-year increase of 13.2 percent. The transportation volume on major coal railroads continued to grow, with the Datong-Qinhuangdao Line transporting 216 million tons, a year-on-year increase of 8.3 percent, and the Houma-Yueshan line transporting 89.38 million tons, an increase of 0.9 percent year on year. Transportation in main ports around the country amounted to 325 million tons, a year-on-year increase of 20.1 percent. Major ports in the north shipped 288 tons, an increase of 19.3 percent year-on-year, with Qinhuangdao Port shipping 123 tons, an increase of 12.1 percent, and Tangshan Port (including Jingtang Port and Caofeidian Port) shipping 59.37 tons, an increase of 43.1 percent.
In the first half year, coal output, railway transportation volume, and port shipping volume of coal have all maintained two-digit growth, indicating that China’s coal supply capability has been improving.
In terms of inventory, the inventory of coal stays at a normal level. As of the end of June, the inventory of coal across society was 221 million tons, 4 million tons more than that at the beginning of the year. Total inventory of coal enterprises amounted to 47 million tons, 4 million tons less than that at the beginning of the year. Coal inventory of key power generating enterprises amounted to 65.36 million tons, 9.29 million tons more than that at the beginning of the year, with the duration of coal in stock for as long as 18 days. Inventory in main transshipment ports amounted to 23.95 million tons, 220,000 tons more than that at the beginning of the year.
Regarding the price fluctuation of coal, the market price stayed relatively stable with slight decline in the first quarter, and went up and stabilized in the second quarter. At the end of June, the price of 5500K steam coal in Qinhuangdao Port was RMB840-850 yuan/ton, 55 yuan/ton higher than that at the beginning of the year and RMB90 yuan/ton higher than that at the same period of last year; in northern Shanxi, the price of 5500K steam coal was RMB655-670 yuan/ton, RMB20-25 yuan/ton higher than that at the beginning of the year and 90-95 yuan/ton higher than that at the same period of last year. In Guangzhou Port, the price of 5500K steam coal was RMB970-985 yuan/ton, RMB85 yuan/ton higher than that at the beginning of the year and RMB150 yuan/ton higher than that at the same period of last year. Since July, the price of coal has declined slightly.
In addition, the operation cost of coal enterprises rises, tax expense and accounts receivable increase, and fixed assets investment continues to grow. According to preliminary statistics, in the first half year, the operation cost of 90 major coal enterprises amounted to RMB 803 billion Yuan, a year-on-year increase of 39.8 percent. Their net accounts receivable amounted to RMB 125 billion Yuan, an increase of 21 percent year on year, and their Value Added Tax payable amounted to RMB 63.5 billion Yuan, a year-on-year increase of 23 percent. Fixed asset investment across the industry amounted to RMB 170.86 billion Yuan, an increase of 19.5 percent year on year.
In the first half year, the overall coal economy in the country remained stable. Demands for coal were vigorous. Output and sales grew rapidly while supply and demands were basically balanced. However, the current balance between coal supply and demands is rather fragile. Regional and temporal imbalance occurs from time to time. Therefore, we not only need to accelerate economic development reform, improve energy efficiency across society, and control the excessive development of high energy consumption industries, but also need to accelerate the development of modernized coal logistics, guarantee emergency storage of coal, improve coal supply, and maintain the stable operation of the market.
The supply of coal results in rapid increase of national coal transportation. According to statistics, in the first half of the year, 1.11 billion tons of coal was transported by rail, a year-on-year increase of 13.2 percent. The transportation volume on major coal railroads continued to grow, with the Datong-Qinhuangdao Line transporting 216 million tons, a year-on-year increase of 8.3 percent, and the Houma-Yueshan line transporting 89.38 million tons, an increase of 0.9 percent year on year. Transportation in main ports around the country amounted to 325 million tons, a year-on-year increase of 20.1 percent. Major ports in the north shipped 288 tons, an increase of 19.3 percent year-on-year, with Qinhuangdao Port shipping 123 tons, an increase of 12.1 percent, and Tangshan Port (including Jingtang Port and Caofeidian Port) shipping 59.37 tons, an increase of 43.1 percent.
In the first half year, coal output, railway transportation volume, and port shipping volume of coal have all maintained two-digit growth, indicating that China’s coal supply capability has been improving.
In terms of inventory, the inventory of coal stays at a normal level. As of the end of June, the inventory of coal across society was 221 million tons, 4 million tons more than that at the beginning of the year. Total inventory of coal enterprises amounted to 47 million tons, 4 million tons less than that at the beginning of the year. Coal inventory of key power generating enterprises amounted to 65.36 million tons, 9.29 million tons more than that at the beginning of the year, with the duration of coal in stock for as long as 18 days. Inventory in main transshipment ports amounted to 23.95 million tons, 220,000 tons more than that at the beginning of the year.
Regarding the price fluctuation of coal, the market price stayed relatively stable with slight decline in the first quarter, and went up and stabilized in the second quarter. At the end of June, the price of 5500K steam coal in Qinhuangdao Port was RMB840-850 yuan/ton, 55 yuan/ton higher than that at the beginning of the year and RMB90 yuan/ton higher than that at the same period of last year; in northern Shanxi, the price of 5500K steam coal was RMB655-670 yuan/ton, RMB20-25 yuan/ton higher than that at the beginning of the year and 90-95 yuan/ton higher than that at the same period of last year. In Guangzhou Port, the price of 5500K steam coal was RMB970-985 yuan/ton, RMB85 yuan/ton higher than that at the beginning of the year and RMB150 yuan/ton higher than that at the same period of last year. Since July, the price of coal has declined slightly.
In addition, the operation cost of coal enterprises rises, tax expense and accounts receivable increase, and fixed assets investment continues to grow. According to preliminary statistics, in the first half year, the operation cost of 90 major coal enterprises amounted to RMB 803 billion Yuan, a year-on-year increase of 39.8 percent. Their net accounts receivable amounted to RMB 125 billion Yuan, an increase of 21 percent year on year, and their Value Added Tax payable amounted to RMB 63.5 billion Yuan, a year-on-year increase of 23 percent. Fixed asset investment across the industry amounted to RMB 170.86 billion Yuan, an increase of 19.5 percent year on year.
In the first half year, the overall coal economy in the country remained stable. Demands for coal were vigorous. Output and sales grew rapidly while supply and demands were basically balanced. However, the current balance between coal supply and demands is rather fragile. Regional and temporal imbalance occurs from time to time. Therefore, we not only need to accelerate economic development reform, improve energy efficiency across society, and control the excessive development of high energy consumption industries, but also need to accelerate the development of modernized coal logistics, guarantee emergency storage of coal, improve coal supply, and maintain the stable operation of the market.
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