Increase Energy Consumption To 5.57% This Year

Under the guiding ideology of clean and low-carbon development goal, China's pace of getting rid of coal consumption dependence is speeding up.

A few days ago, the State Energy Administration officially issued the energy work guidance in 2020 (hereinafter referred to as the guidance). According to the requirements of the guiding opinions, the main expected targets for 2020 are as follows: about 193 million tons of oil, 181 billion cubic meters of natural gas, and about 900 million kilowatts of non fossil energy power generation. China's total energy consumption does not exceed 5 billion tons of standard coal, and the proportion of coal consumption has dropped to about 57.5%.

"In recent years, the state has been focusing on regulating the energy structure. Compared with developed countries, China's coal consumption is still dominant, and clean energy such as wind energy accounts for a small proportion at present. " On July 1, Zhang Min, an analyst with Zhuo Chuang information, said in an interview with a reporter from the 21st century economic report that the idea of reducing the proportion of coal consumption will continue for the sake of environmental protection and energy conservation.

Energy structure adjustment

According to the guiding opinions, in order to further optimize the structure of coal production capacity, China plans to withdraw a batch of backward coal production capacity in 2020. The number of coal mines is controlled within 5000, and the output of large coal bases accounts for more than 96% of the national coal production. In addition, it will further promote the clean and efficient utilization of coal, strengthen the comprehensive treatment of scattered coal, strictly control the use of inferior coal, and further increase the proportion of raw coal and coal for power generation. We will continue to improve the plan for ensuring the supply of coal and the plan for orderly use of coal, so as to ensure the stable supply of coal for people's livelihood such as power generation and heating.

"This adjustment is based on the current situation within the industry integration." On July 1, Li Chaolin, an expert in the coal industry of Henan Shenhuo Group Co., Ltd., explained to reporters of the 21st century economic report that in terms of coal control, the number of coal mines should be limited according to the national demand. "In order to alleviate the situation in the coal supply areas, the number of days for production of some coal enterprises will be reduced, and the effective production capacity will match the demand, otherwise there will be serious oversupply and disordered market competition."

The head of Shougang Resources Office said that the planned output of the whole year this year was the same as that of last year, maintaining at 1.3 million tons. "The decline of consumption proportion in the guidance has a greater impact on steam coal. Shougang mainly produces coking coal, while the downstream of coking coal is mainly steel industry, and the downstream of steel industry is mainly machinery, household appliances, automobile and aerospace. Therefore, it is still optimistic about the company's operation."

In fact, the proportion of coal energy has been in a downward trend in recent years. According to the "statistical bulletin of the people's Republic of China on national economic and social development in 2019" issued by the National Bureau of statistics, the total energy consumption in 2019 is 4.86 billion tons of standard coal, an increase of 3.3% over the previous year. Coal consumption increased by 1.0%, accounting for 57.7% of the total energy consumption, down 1.5 percentage points over the previous year. In 2018, the figure was 59.0%, down 1.4 percentage points from the previous year.

"But in terms of total coal consumption, it is still growing, because the overall consumption is increasing, and the proportion is a relative concept." A researcher in the coal industry of a securities company in Beijing told the 21st century economic reporter that the absolute amount of coal consumption may actually increase slightly. "In terms of the trend of energy consumption, the growth rate of coal consumption will definitely come down. But from the current point of view, the important position of coal consumption should not change. "

Supply and demand rebalancing

China is the largest coal consumer in the world, coal consumption accounts for more than 50% of the world, and coal power accounts for more than 60% of the total national power generation. Affected by the epidemic situation, the coal demand in the first quarter of 2020 decreased significantly. Compared with the same period last year, the coal consumption in the first quarter of 2020 decreased by 8%, and the coal power generation decreased by nearly 9%.

This situation improved significantly in the second quarter. "In terms of domestic demand, in terms of daily consumption, domestic production has returned to the same period last year, or even better than the same period last year." "But at present, the most important problem is focused on the external drive, such as some coastal factories. Orders or power generation are greatly affected by overseas demand. The performance mainly depends on whether the inflection point of overseas epidemic situation can appear, which is a major challenge for coal demand side this year

As the upstream of coke, because coal mines resume work faster than coke ovens, domestic coking coal has been maintaining a loose pattern since this year, and factories and warehouses continue to accumulate. Combined with the impact of the epidemic situation, the price of coke continued to be depressed. Since May, with the supply and demand relationship in the market tending to balance again, the price of coke has only risen.

Jinneng technology, a listed company that mainly produces coke, said in an interview, "since April to may, the company's main product coke has also experienced several rounds of price increases. In recent years, coke has also been reducing energy. If the demand is further reduced this year, the price of our raw material coal may rise, and the price of Coke will also rise."

This view is also recognized by the above-mentioned brokers: "coke upstream is stimulated by de capacity expectations and low inventory, and downstream is constrained by low profits of steel mills. Judging from the rebound of coke in this round, the coke rebounded for 5 rounds, with an accumulative increase of about 250 yuan / ton. "

The price of steam coal has experienced a roller coaster in the past six months. "Generally speaking, the overall price fluctuation of steam coal is not large, but it has decreased significantly in the first quarter, and gradually recovered in the second quarter." Zhang Min told reporters that it is expected that in the second half of the year, the overall trend will be to hit the bottom and rebound.

In Zhang Min's view, another main reason for the recovery of steam coal market in the second quarter is that the horizontal control policy of imported coal began to work. From January to April 2020, China's coal import volume was 130 million tons, with a year-on-year increase of 26.9%. From January to April, the total amount of coal imports increased significantly. From the beginning of May, the state began to restrict the customs clearance of imported coal and tighten the import coal policy, so the quantity of imported coal also decreased. According to the latest data, in May, the import of coal was 22.06 million tons, a month on month decrease of 8.89 million tons, a year-on-year decrease of 19.7%; from January to may, the import of coal was 149 million tons, with a year-on-year increase of 16.8%, while the year-on-year growth rate from January to April was 26.9%.

"In fact, the price of coal can be controlled within the range of green coal price, which can be controlled from the coal storage tank to the coal price range." Zhang Min explains.

The consensus of the industry is that the supply-demand relationship of coal will gradually stabilize. "At present, the upstream coal production enterprises are in a state of low inventory, and the downstream power plants can purchase some coal in the current price range at the right time, because the peak season is coming soon. If you purchase in the peak season, it is very likely to raise the price again." The broker added.