According to forecast, with China's macroeconomic stabilization and stabilization, output of high-energy-consuming products such as electricity, steel, and cement in China is expected to stabilize and rise in the fourth quarter, which will lead to a stable increase in coal demand.

The steady growth of the economy stabilized in the third quarter, and the changes in indicators such as fixed asset investment, total retail sales of consumer goods, and industrial added value showed that China’s economy has clearly stabilized and stabilized. People in the industry believe that although the coal industry in China has passed the decade of gold, the coal industry is unlikely to enter the down cycle in the future, and oversupply will not change.

In the fourth quarter, China's thermal coal demand is expected to rise steadily. On the one hand, the winter is the use of electricity and coal, the peak of coal, seasonal electricity, and the increase in demand for coal. At the same time, compared with the summer, the output of hydropower will fall significantly, and the demand for thermal power will increase.

On the other hand, as industrial production stabilizes and picks up, industrial electricity consumption, especially heavy industry electricity consumption, is expected to rise steadily, which in turn will boost demand for coal for power generation. Moreover, due to the increase in investment in fixed assets, the cement market has improved, affected by the expected improvement, cement production in the coming months will also increase steadily, and drive fuel and steam coal demand picked up steadily.

Among them, in the third quarter of the decline in crude steel production and policy stimulus, starting in mid-September, China's steel prices have risen significantly, steel prices rose more than 10% in more than a month time. Affected by the rebound in steel prices and the improvement in demand for steel products, after October, crude steel production is expected to gradually recover, and the demand for metallurgical coal such as coking coal and coal jets is expected to rise steadily.

At the same time, the demand for smokeless lump coal will also increase steadily. Although domestic agricultural urea entered the off-season demand in the fourth quarter, urea export will begin to implement the tariff for the peak season, and the urea market demand will enter a low point. However, due to the expected stabilization of coal demand, the price of anthracite in the previous period has experienced a significant correction. Under the circumstance of coal demand recovery, it is expected that the demand for coal purchases by nitrogen fertilizer enterprises will not be reduced. Instead, it will rise steadily.

Steady growth in market recovery and output increase According to forecast, in the fourth quarter, under the condition of sufficient production capacity, China's coal production will gradually improve, and coal production will gradually drop and rise. At the same time, under the circumstance that the supply and demand of coal in the international market is loose and international coal prices continue to fluctuate at low levels, China’s coal imports will also stop falling and rise.

However, in the fourth quarter, due to the decline in coal prices and difficulty in sales, the more coal mines were produced, the more backlog there was, and the greater the risk of losses, some companies stopped production. Moreover, due to mining difficulties, local authorities required all types of local coal mines to stop production for rectification. In order to maintain a good safe production situation, the government's requirements for safety production of coal mines are more stringent, and many technologically-improved mines and even production mines have stopped production and stopped production.

At the same time, as the inventory accumulated in the early stages of coal mines gradually falls, the coal market has stabilized, and some coal mines that previously suspended production are expected to resume production gradually. In recent years, large state-owned coal companies have invested too much in large-scale mine construction and mergers and reorganizations. Many mines have just been put into production and companies need to maintain normal production. As the market stabilises and picks up, raw coal production will also gradually rebound.

As the stabilization of domestic coal prices will help improve the market expectations of traders and increase coal imports, the overall amount of imported coal landings in the coming months is expected to stabilize. In fact, from September onwards, China's coal-fired power plants purchased more winter coal. However, due to the overhaul of the Daqin Railway, some coal mines in the main producing provinces stopped production and restricted production due to various reasons, and domestic coal supply was affected. In this case, some coal-mining companies in East China and South China will inevitably increase the purchase of imported coal in order to ensure stable supply of coal. At the same time, it is expected that some traders will also seize the opportunity of winter storage coal and increase coal imports, which will prompt coal imports to rise again after October.

Rising space limited coal prices within a narrow range of shocks As of early November, China's thermal coal rose slightly for nine consecutive weeks, coal demand and prices have steadily risen. Analysts believe that although China's macro economy has stopped falling and stabilized, compared with previous years, the economic situation at home and abroad have been different. The European debt crisis has not been resolved effectively. Export growth is still facing greater pressure. The pace of adjustment of domestic economic structure is expected to accelerate, and the financing of local governments is more difficult. It is no longer possible to start infrastructure investment projects as easily as it was three years ago. Therefore, although coal demand is expected to stabilise and recover as a whole, the rate of recovery must not be too large in the short term, which will fundamentally limit the room for coal price rise.

In addition to coal demand, the high coal stocks in downstream segments are also important factors that restrict the recovery of coal prices. The major ports of loading and unloading in Ningbo Port, Guangzhou Port, Fangcheng Port, etc. all have their coal stocks at historically high levels. At the same time, coal reserves of key power plants in the country exceeded 90 million tons, and the average number of days available is approaching one month. The purchasing enthusiasm of downstream coal companies will hardly be significantly improved, and coal companies will only combine their own needs with their use. In addition, due to the relatively loose coal supply and demand situation in the international market, coal prices rose weakly. This will also lead to the diversion of domestic coal prices through coal imports.

Since September, China's thermal coal prices have shown signs of stabilization from pits to ports. In markets where demand is still weak, supply contraction is an important reason for supporting coal prices. Although in the fourth quarter, from the inspection of Daqin Line, the proportion of water and electricity, and winter storage coal, the coal price has an upward reason. However, under the current situation of excess demand and capacity, the probability of a substantial increase in coal prices is not significant. In the fourth quarter, if the coal price rises during the peak season as scheduled, there are at least two conditions: the stabilization of the macro economy and the continuation of the government's mandatory production restriction policy.

In fact, each year after peak summer, after entering the peak season of coal in the fourth quarter, it will usher in a wave of coal winter reserves, and then raise the price of coal. For the fourth quarter, the coal price rebounded, or remained stable, most people in the industry believe that China's coal production capacity over the demand has not changed. At present, coal prices have approached the bottom and there are clear signs of stabilizing, but there is little chance of recovery. It is expected that after a slight increase in the fourth quarter, it will oscillate in a narrow range.