Thermal coal futures market seminar, as part of the 2019 China Coal Market Annual Meeting and Global Seaborne Coal Market Summit, was successfully held on the morning of April 10, 2019. Dr. Feng Yu, Vice Chairman of China Coal Transportation and Distribution Association and President of China coal market, attended the meeting and delivered a speech.
Dr. Feng Yu pointed out at the meeting that the futures market plays an irreplaceable role in improving enterprises' operational capacity and optimizing inventory management. The National Development and Reform Commission determined the medium and long-term contract system of coal and the pricing mechanism of “base price plus floating price” in 2017, and clearly stated that the floating price should be comprehensively determined in conjunction with the “CCTD Qinhuangdao Coal Price Index” and other contents. The medium- and long-term contract system of coal has achieved remarkable results, and has played the role of "ballast stone and stabilizer" in the smooth operation of the coal market. He believed that in the next stage, the introduction of thermal coal futures prices to long-term agreement prices was an important part of further promoting the reform and development of the coal industry and the continuous development and improvement of China's coal marketization system.
Dr. Feng Yu, Vice Chairman of China Coal Transportation and Distribution Association and President of China coal market
He said that in 2019, China Coal Transportation and Distribution Association would continue to play the role of industry coordination, and further strengthen cooperation through various meetings and research visits. We believed that under the joint participation of all parties in coal production, transportation and procurement and cooperation of various enterprises, we would be able to achieve breakthrough development in the coal industry market and trading system, and contribute to the market-oriented reform and sustainable and healthy development of the coal industry.
Li Xuegang, Vice President of China Coal Market
Later, Li Xuegang, Vice President of China Coal Market gave a wonderful speech on the topic of “Analysis of Factors Affecting the Thermal Coal Market in Coastal Areas in 2019”.Li Xuegang emphasized thermal coal prices of various supply methods would show a trend from high to lowin 2019, and the price center will move down as a whole. Safety issues may become a disturbance factor to restrain coal prices from falling.
Cui Chunguang, Manager of the Futures Department of Ruimaotong
Cui Chunguang, Manager of the Futures Department of Ruimaotong, explained the case of thermal coal hedging and combined with further discussion of the strategy. He believed that due to the restrictions on coal selling tickets and import restrictions, the subsequent downside would be limited. Cui Chunguang pointed out that the most intuitive feeling at present was that domestic demand has not yet come out, but the release of demand would make the market change significantly. If you followed the rhythm of the spot, it would lag behind. If we wanted to consider the later situation, we should try our best to think long.
Feng Yuan, Chief Strategist of Mercuria Energy
Feng Yuan, Chief Strategist of Mercuria Energy, gave a speech on "2019 Thermal Coal Balance and First Quarter Thermal Coal Industry Data Analysis". First, Feng Yuan briefly explained several factors affecting the coal market, and then he shared the framework of thermal coal research. However, in the big cycle of the coal industry, whether it would return to the market in 2012-2013, Feng Yuan did not agree. He pointed out that there was actually no so-called excess capacity in China, which was the most fundamental difference from the past. On the other hand, due to the adjustment of the economic structure in recent years, the power generation will no longer be linked to the traditional economic cycle. Even if the industry declines, the power generation will not show a significant decline.
The speakers of this event deeply analyzed the current and post-market thermal coal market operations in terms of macro policies and supply and demand of upstream and downstream industrial chains, analyzed the principle of futures hedging, the significance of production and management, as well as how to use and other contents in the actual operation.
Participants of the seminar said that the exchange at the seminar not only enhanced the understanding of the macro fundamentals and future market forecast of thermal coal, but also further improved the understanding of futures financial derivatives, which was of great help for enterprises and individuals to grasp and use futures tools to realize hedging and resist risks.
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