2019 is the 70th anniversary of the founding of the People's Republic of China. This year, the internal and external challenges of the coal industry are intertwined, and supply-side structural reforms have entered a new stage. The economy is operating steadily and advancing. Coal people continue to explore high-quality development paths to inject energy power to ensure the development of the national economy.
"Excellent" production capacity and stable supply
In 2019, the coal industry will conscientiously implement the decision-making and deployment of the Party Central Committee and the State Council, adhere to the general tone of steady progress, and focus on supply-side structural reforms to promote high-quality development.
The National Development and Reform Commission issued a notice in May this year, saying that since 2016, China has withdrawn from lagging in coal production capacity by 810 million tons, and completed the “13th Five-Year Plan” plan to reduce production capacity 2 years in advance. A new phase of systematic capacity reduction and systematic and superior capacity ".
According to China Coal Industry Association statistics, as of the end of 2018, the number of coal mines has been reduced from more than 10,000 at the end of 2014 to about 5,800.
Lagging out of production capacity accelerated, and production capacity continued to be released. The energy conference held a few days ago revealed that in 2019, China closed down and exited more than 450 backward coal mines and overfulfilled the goal of reducing capacity; coal mines with an annual output of 1.2 million tons and above reached three-fourths of the total capacity, further enriching resources Regional concentration.
Data from the Statistics Bureau and the General Administration of Customs show that in the first 11 months of this year, raw coal production was 3.41 billion tons, an increase of 4.5% year-on-year; imported coal was 29.926 million tons, an increase of 10.2% year-on-year.
In addition, with the increase and opening of a number of railway-only transportation capabilities such as the Daqin Line, the Mongolian-Hebei Line, the Shuohuang Line, the Waji Line, and the Haoji Line, the bottlenecks in coal transportation within the scope are gradually being lifted.
Price "green" market stable
Production, import volume and transportation capacity are all increasing. The overall coal supply guarantee capability has been greatly enhanced, but the growth rate of coal consumption is slowing down. In 2018, total energy consumption increased by 3.3% year-on-year, and coal consumption increased by 1.0% year-on-year, and its share in total energy consumption fell below 60%. In the first 10 months of this year, coal consumption increased by only 0.8% year-on-year.
In the past three years, the annual output of coal has continued to increase, coupled with the “market stabilization” effect of the “baseline + floating price” pricing mechanism, the market price has remained in the green range. In particular, the medium and long-term contract price has been stable between 550 yuan and 570 yuan per ton for three years. In 2019, more than 70% of thermal coal contracts are long-term associations, and the compliance rate in the first three quarters was more than 90%.
Against the background of the stable operation of the coal market, the State Council executive meeting held in September this year decided to cancel the coal-electricity price linkage mechanism for coal-fired power generation that has not yet achieved market-based trading from January 1, 2020. China bid farewell to the 15-year coal-electricity price linkage mechanism.
Statistics from the China Coal Industry Association show that since the fourth quarter of this year, market demand has slowed down, and the domestic coal market supply has shifted towards easing. The overall coal storage in the society is at a relatively high level, and the market is in a weak downward trend.
Relevant persons in charge of the China Coal Industry Association have stated many times that the current and future period of coal excess will become the norm. With the accelerated release of new coal production capacity, downward pressure on the market has emerged. Coal enterprises must follow market rules and organize production in accordance with market demand.
Benefit differentiation and deepening reform
In 2019, the supply-side structural reform of the coal industry has been further advanced, and production capacity has continued to increase. However, with the reform entering deep-water areas, affected by factors such as the state-owned enterprise's historical problems, the coal industry's economic differentiation has become increasingly apparent.
According to the data of China Coal Industry Association, in the first three quarters of this year, the total profit of coal enterprises above designated size was 216.05 billion yuan, a decrease of 3.2% year-on-year, and the total profit of 90 large coal companies (including non-coal) calculated by the association for the first nine months was 1244.7 100 million yuan, a year-on-year increase of 3.8%. Data from the Statistics Bureau show that in the first 11 months of this year, total profits of coal enterprises above designated size reached 266.27 billion yuan, a year-on-year decrease of 1.7%.
At present, the intelligent wave is in the ascendant, and 183 intelligent coal mining faces have been built in 152 coal mines. However, the gap between companies with backward technological equipment and advanced companies is widening, and there are still many coal companies at the point of low profit and profit balance. Deepening reform has become an inevitable choice.
The SASAC recently held a meeting of heads of central enterprises revealed that the three-year action plan for the reform of state-owned enterprises will be introduced early next year to take this opportunity to promote new breakthroughs in state-owned enterprise reform. The SASAC made it clear that the regional integration of coal power resources will become the focus of work next year.
