On April 28, the Ministry of Finance announced that in order to strengthen the guarantee of energy supply and promote high-quality development, the Tariff Commission of the State Council recently announced that the provisional import tax rate of zero will be implemented for all coal from May 1, 2022 to March 31, 2023.
Affected by this, as of the closing of April 28, the overall increase of coal mining and processing sector was 2.77%, China Coal Energy Company Limited(601898) limit, Shaanxi Coal Industry Company Limited(601225) , China Shenhua Energy Company Limited(601088) , Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) respectively rose 9.32%, 7.73% and 7.02%.
Due to the serious inversion of imported coal prices recently, zero tariff on coal import is mainly intended to reduce the cost of coal import.
Su Jia, an analyst at Zhongyu information, told the Securities Daily that since 2022, the policy of increasing coal production and supply has continued to be strengthened, and the main coal producing provinces and regions have made every effort to tap the potential and expand capacity and supply. In the first quarter, the production of raw coal was 1.08 billion tons, a year-on-year increase of 10.3%. In March, the production of raw coal was 396 million tons, a year-on-year increase of 14.8%, and the average daily output was 12.77 million tons, a new high in recent years. With the increase of downstream daily consumption and the increase of coal demand, the coal market may usher in a prosperous situation of both supply and demand.
imported coal price inversion serious
The introduction of zero tariff on coal import is related to the sharp rise in international coal prices.
Since March, due to geopolitical and other factors, the coal gap in the international market has increased, the international coal price has soared all the way, and the coal price inversion outside China has been serious.
According to the latest data monitored by China coal market network, in the international market, as of April 22, the thermal coal price index of Newcastle port in Australia was 370 US dollars / ton, the thermal coal price index of Richards port in South Africa was 325.5 US dollars / ton, and the thermal coal price index of three European ports was 348.3 US dollars / ton, up 9.9%, 4% and 11.9% respectively compared with that as of April 15.
In contrast, in the Chinese market, according to the data of Qinhuangdao coal network, from April 20, 2022 to April 26, 2022, the Bohai Rim thermal coal price index closed at 735 yuan / ton, far lower than the coal price in the international market.
Yang Jie, a researcher at Yimei Research Institute, also told the Securities Daily, “due to the shortage of imported coal resources caused by geopolitics, the price difference of coal outside China has expanded significantly, and it is relatively difficult for China to increase its coal import.”
According to the latest data released by the General Administration of customs, in March 2022, China imported 4.328 million tons of thermal coal (including bituminous coal and sub bituminous coal, but excluding lignite, the same below), a year-on-year decrease of 60.3%. China imported 7.606 million tons of lignite, a year-on-year decrease of 25.93%.
Industry insiders believe that if the international coal price continues to operate at a high level and the price inversion of imported coal is serious, the enthusiasm of Chinese end users to purchase imported coal will not be high.
Guotai Junan Securities Co.Ltd(601211) research report mentioned that from the import situation, there was no import tariff for Indonesian coal before, and the low customs clearance of Mongolian coal was not caused by the tariff, but due to the prevention and control of the epidemic. From the perspective of the tariff reduction of 3%, the impact on the coal import price ranges from 30 yuan / ton to 50 yuan / ton, which has a very limited impact on the current price adjustment of marine coal, and is not enough to reopen the import window of Canadian Coal and American coal.
the policy of ensuring supply and price stability continues to work
On the one hand, under the background of “coal grabbing”, China’s imported coal is decreasing. On the other hand, the peak of coal consumption is imminent. Increasing coal supply and stabilizing coal price is still the top priority to stabilize the coal market.
On April 25, the analysis and prediction report on the national power supply and demand situation in the first quarter of 2022 issued by the China Electricity Council pointed out that affected by geopolitical conflicts, the international supply of coal, oil and gas is tight, which makes it more difficult for China to import coal and natural gas. China’s downstream coal inventory is still relatively low, the price of electric coal fluctuates at a high level, and there are potential risks in the protection of coal and gas power supply during the peak summer.
On April 28, the China coal transportation and Marketing Association issued a proposal, saying that the current international energy situation is complex, China’s external environment has changed beyond expectations, and the pressure to ensure the supply and price of coal has increased. It also suggested that all member units should implement the work requirements of increasing coal production and supply, further promote the release of high-quality production capacity and orderly production, and earnestly implement the requirements for the signing and performance of medium and long-term coal contracts, Ensure that coal prices operate within a reasonable range.
With the continuous development of the policy of ensuring supply and stabilizing price, the shortage of coal supply has been alleviated to a certain extent.
“At present, affected by the previous supply guarantee policy and the decline in demand, the coal inventory of China’s power plants will recover to the same level in 2020 in the short term. If the future power demand returns to the state of January and February this year, it will still be tense according to the current inventory.” The energy industry analyst of a securities firm told the reporter of Securities Daily that the subsequent resumption of work and production will add to the peak season of residential power consumption. If the inventory can not be replenished in time to maintain a high level, the coal price will still be likely to rise.
