The supply and demand relationship in the coal market is expected to be further improved

Capacity reduction is an important task in the supply side structural reform. Last year, China withdrew more than 290 million tons of coal production capacity. This year's government work report proposed that in 2017, China will withdraw more than 150 million tons of coal production capacity. The supply and demand relationship in the coal market is expected to further improve.
The relevant person in charge of the Economic Operation Regulation Bureau of the National Development and Reform Commission told reporters on the 7th that with the promotion of coal de production, there have been some positive changes in the relationship between supply and demand. The target of capacity reduction this year has been reduced to a certain extent compared with that of last year. The main reason is to reasonably grasp the pace of capacity reduction, take into account the effective connection of continuous resources and the stable supply of coal.
In recent years, the price of coal market has shown signs of staged rise. From the perspective of demand, since this year, the demand for electricity from economic operation has grown rapidly, coupled with a significant reduction in hydropower output, and thermal power generation has increased. The dispatching data of relevant aspects show that the national thermal power generation increased by 8.1% year on year in January and February, while the hydropower generation decreased by 10.7% year on year, leading to a large increase in coal consumption.
In terms of supply, due to the insufficient resumption of production after the Spring Festival holiday in some coal mines and the local strengthening of coal mine safety production inspection and other factors, there are many coal mines that have stopped production, which restricts the recovery of coal production. In addition, the industry's expectation of capacity reduction policy also has a certain impact on the trend of coal prices.
"With the end of the heating coal peak in the next stage, the increase of water from the south, the increase of hydropower output, and the gradual resumption of production of coal mines during the Spring Festival holiday and other factors, the supply and demand relationship will tend to be relaxed, and the coal price is expected to show a steady downward trend, without a significant increase." The person in charge said.
It should be noted that the overall pattern of China's coal overcapacity has not fundamentally changed. In terms of how to promote capacity reduction in the next step, the industry is widely concerned about whether and how the coal mine production reduction measures will continue to be implemented.
According to the National Development and Reform Commission, the basic premise for the implementation of coal mine production reduction measures is to ensure the stable supply of coal, promote the maintenance of coal prices within a reasonable range, help coal workers to work and rest reasonably according to legal working hours, increase coal mine maintenance time, and better ensure safe production.
In view of the current situation, with the in-depth promotion of coal capacity reduction, a number of ineffective and inefficient production capacity has been accelerated to exit, illegal construction of coal mines and super capacity production have been effectively curbed, and the supply and demand relationship in the coal market has been significantly improved. "It is no longer necessary to implement large-scale coal mine production reduction measures in 2017," said the person in charge.
It is reported that relevant departments are demonstrating the policy plan after the heating season. The basic consideration is that in principle, coal mines with advanced production capacity and coal mines with special shortage of coal will not implement the measures of reducing production; For regions with a large amount of coal transferred in and great pressure on resource succession after capacity reduction, the provincial government of the location shall decide whether to implement the measures of reducing production, and the state does not make rigid requirements; Whether and how to implement the measures of reducing production for non advanced production capacity in other regions will be considered by relevant departments according to the coal market situation and in combination with factors such as coal supply and demand regions, layout, transportation, varieties and seasonal demand. When the coal price is still above the reasonable range, there will be no measures to reduce production.
The person in charge said that, in the next step, the relevant departments will earnestly implement the decisions and arrangements of the CPC Central Committee and the State Council, handle the relationship between the government and the market, short-term and long-term, subtraction and addition, supply and demand, seize the "bull nose" of "zombie enterprises", more actively use market-oriented and rule of law methods, adhere to a clearer standard to reduce production capacity, and further improve the supply and demand relationship in the coal market.