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Regarding the new problems faced after production restriction, the National Development and Reform Commission stated that China’s coal supply oversupply trend has not fundamentally changed, and the “276-day” coal production restriction policy must still be strictly implemented.
Recently, coal prices have continued to rise, and local supplies have become tight, and some downstream companies are facing greater pressure. At the end of September, the National Development and Reform Commission successively launched the secondary and primary response mechanisms, increasing coal production capacity to 500,000 tons per working day.
The assistance triggered the relevant person in charge of the Operation Bureau of the Reform Commission to say that in July, August and the first 20 days of September, the rapid rise of coal supply and demand caused the supply and demand of coal to shift from a basic balance to tight supply in some areas in a relatively short period of time, and the market coal price appeared to rise faster. momentum.
The person in charge said that for the current new situation, from the perspective of demand, it is not caused by rigid demand growth; from the perspective of supply, it is not lack of supply capacity, but actively regulating production capacity.
As for the way to solve the problem, he said that the way is very clear, that is, to release part of the safe and efficient advanced production capacity in an orderly manner and increase the production capacity appropriately. Eligible coal mines can release production capacity within 276 to 330 working days, and coal mines that are not involved in the release of production capacity must still strictly implement the 276 working day system.
The following is the full text of the Q&A from the China Economic Herald's interview with the relevant person in charge of the Operation Bureau of the Development and Reform Commission:
Recently, the National Development and Reform Commission has adopted appropriate fine-tuning policies to stabilize coal prices and supply in response to the excessively rapid rise of market coal prices and tight local supplies. So, what causes coal prices to rise and local supplies are tight? How should we view and solve this problem? ... On this topic, a reporter from China Economic Herald interviewed the relevant person in charge of the National Development and Reform Commission's Operation Bureau.
One question: Why is there currently a situation of rising coal prices and tight local supply?
Relevant person in charge of the Operation Bureau: From January to August, the country withdrew from 152 million tons of coal production capacity, reduced production control capacity by about 600 million tons, and achieved obvious results in the control of illegal coal mine construction and production, over-capacity production, and low-quality coal production. Output fell by 10.2% year-on-year, and the situation of oversupply in the market was changed. This is not only the original intention of overcapacity reduction, but also the inevitable result of overcapacity reduction. It fully demonstrates that the decision of the Party Central Committee and the State Council to resolve excess production capacity in the coal industry is completely correct.
Since July, most areas of the country have continued to have high temperatures and low rains. Electricity consumption for air-conditioning has increased significantly, hydropower output has decreased significantly, and thermal power production has increased significantly. In July, August, and the first 20 days of September, thermal power increased by 4.8%, 7.3%, and 12.9% year-on-year, and thermal coal increased by 2.7%, 6.7%, and 14% year-on-year, resulting in a basic balance between coal supply and demand in a relatively short period of time. Shifting to tight supply in some regions. The market coal price has shown a momentum of accelerating rise. In June, the price of 5500 kcal thermal coal at Qinhuangdao Port increased by 10 yuan/ton, 30 yuan/ton in July, 65 yuan/ton in August, and 70 yuan/ton since September. The current price is 565 yuan/ton. An increase of 195 yuan/ton at the beginning of the year. The coal supply of power plants, steel mills and other companies in individual regions has been tight.
Question 2: How do you view the current coal price rise and local tight supply?
Relevant person in charge of the operation bureau: First, we must attach great importance to it. The improvement in the relationship between coal supply and demand is the original intention and inevitable result of capacity reduction. A moderate rise in coal prices will help improve the business environment and promote the healthy development of the industry. However, we must avoid irrational price increases and tight coal supply. The negative effects of excessive price increases are manifold. The first is to encourage irrational behavior of enterprises. Some small coal mines may take the opportunity to resume production and impact the normal production order. The second is to increase pressure on downstream users, which is not conducive to the harmonious development of upstream and downstream industries. If coal prices continue to rise, it will inevitably trigger the coal-electricity price linkage mechanism. The third is to make it difficult for the country to implement macro-control and coordinate the implementation of the "three removals, one reduction and one supplement" task, which interferes with the overall situation of overcapacity reduction.
It should be pointed out that there must be no problems with the supply of coal, especially the supply of electric coal. Coal is connected to downstream power production, gas supply, and residential heating, and is related to the national economy and people's livelihood. In particular, it has entered a critical period of preparing for winter coal storage. The northeast region is approaching the winter heating period. Ensuring a stable supply of coal is related to stable economic operation and social stability, and there is no room for accidents. All parties concerned must attach great importance to the new conditions and new trends in the current coal market. While doing a solid job in reducing overcapacity, they must take prompt and effective measures to accelerate the release of qualified safe, efficient and advanced production capacity to promote stable market supply and restrain The price of coal is rising too fast, creating a good environment for smoothly promoting capacity reduction.
Second, the problem can be solved, and it can be solved quickly. From a demand perspective, the current new situations and problems are not caused by rigid demand growth. Coal consumption still fell by 3.1% in the first eight months. From a supply perspective, it is not lack of supply capacity, but proactive control of production capacity. The production capacity of about 1 billion tons controlled by reducing production and curbing illegal and illegal construction can be released conditionally and orderly according to changes in market demand. Therefore, we are fully equipped and able to quickly address structural problems in the supply and take response measures to ensure that the coal supply and demand situation is basically stable.
Third, the problem must be resolved, and the government must play its role effectively under the premise of following the laws of the market economy. Some companies believe that the government should not interfere with coal prices now that they should play the role of the market. Two points need to be explained: First, behind the price increase, it reflects the adjustment of supply and demand from quantitative change to qualitative change, which is a major problem of hard gaps in supply; second, if it is not the implementation of policy measures to reduce capacity and control output, supply and demand Noodles will not improve so quickly, and coal prices will hardly pick up in the short term.
Three questions: How to solve this problem?
Relevant person in charge of the Operation Bureau: The method has been very clear, that is, to release part of the safe and efficient advanced production capacity in an orderly manner and increase the production capacity appropriately.
First, the release subjects specifically include: according to the relevant documents of the National Development and Reform Commission, the advanced production coal mines assessed by the China Coal Industry Association; the 2015 first-level safety and quality standardized coal mines announced by the National Coal Mine Safety Supervision Bureau; and local declarations to the China Coal Industry Association Safe and efficient coal mines. This does not include coal and gas "double outbursts", rock bursts and other coal mines with serious disasters, high safety risks, and uncertain safety; considering the actual needs of coal types and restrictions on transportation distances for specific users, it is difficult for the above entities to effectively undertake capacity adjustments In terms of tasks, some coal-producing provinces (autonomous regions, municipalities) can select a few coal mines from the second-level safety and quality standardized coal mines in 2015, and then incorporate them into the scope of capacity adjustment enterprises after filing.
Coal mines that meet the above conditions can release production capacity between 276 and 330 working days. Coal mines that do not participate in the release of production capacity must still strictly implement the 276 working day system.
Second, the release period. In order to effectively guarantee the need for coal for heating, gas supply and power generation production this winter and next spring, the production capacity release period is tentatively scheduled from October 1, 2016 to December 31, 2016. During implementation, the release implementation and suspension dates will be determined according to market supply and demand. Relevant regions can make specific arrangements for the above dates according to the local coal supply and demand situation.
Third, the level of regulation. Implement hierarchical implementation and orderly organize capacity release. Adopt two levels of central and local regulation. At the national level, the National Development and Reform Commission, the National Energy Administration, and the National Coal Mine Safety Supervision Bureau continue to entrust the China Coal Industry Association to further release advanced production capacity in accordance with the requirements of the plan to stabilize coal supply and restrain coal prices. Supply and demand of coal.
At the local level, relevant coal-producing provinces (autonomous regions and municipalities) should promptly formulate a capacity release plan based on the needs of the local market to balance the capacity, clarify the names of coal mines participating in capacity release and regulate the number of capacity and output. The implementation will be launched before September 30 and reported. Inter-ministerial joint meeting office for the record.
In addition, by promptly promoting the linkage of increase and decrease, guide the construction of coal mines to be put into production in an orderly manner in accordance with laws and regulations. Relevant regions should promote the construction of coal mines in accordance with the requirements of the relevant documents of the National Development and Reform Commission and other three departments to implement production capacity replacement indicators and sign increases and decreases linked agreements. For newly-built coal mines that have implemented production capacity replacement targets within the specified time (including replenishment procedures for unapproved coal mines), the closing time requirements for exiting coal mines are appropriately relaxed, and new coal mines can be put into production before the capacity replacement coal mines are closed.
Four questions: Can such adjustment work?
Relevant person in charge of the Operation Bureau: In response to the continuous increase in coal prices at the previous stage, the National Development and Reform Commission, the Energy Administration, the Coal Mine Safety Supervision Bureau, and the Coal Industry Association have studied and formulated a plan for stabilizing coal supply and restraining coal prices from rising too fast in August. In early September, combined with changes in the market situation, a secondary response to the plan was launched, releasing approximately 300,000 tons of production capacity per day. In late September, it increased its efforts to initiate a first-level response, which could release 500,000 tons of production capacity per day. From the perspective of implementation effects, coal reserves in power plants and ports have risen. As of the end of September, 56 million tons of coal were stored in key power plants across the country, an increase of 5.3 million tons or 10.4% from the end of the previous month, and it can be used for 17 days. There was 3.17 million tons of coal in Qinhuangdao Port, an increase of 550,000 tons or 21% from the end of last month.
Taking into account factors such as the current low season of coal consumption, the decline in coal consumption in the key coal industry during the "11th" holiday, and the increase in production capacity, the next step, the relationship between coal supply and demand will tend to ease, and prices are expected to stabilize or fall slightly.
Five questions: Why should we persist in 276 working days without wavering?
Relevant person in charge of the Operation Bureau: At present, the trend of severe overcapacity and oversupply of coal in my country has not fundamentally changed. On the one hand, demand is negative growth. Since 2014, coal demand has continued to decline, with a decrease of 3.4% and 4.9% in 2014 and 2015 respectively, and a decrease of 3.1% in the first eight months of this year. In the coming period, the intensity of energy consumption will decline, especially with the rapid development of renewable energy and clean energy, the coal market demand will hardly have room for absolute growth. The total energy consumption in 2020 is expected to be less than 5 billion tons of standard coal, and coal consumption is at most 4.1 billion tons. On the other hand, the existing and potential production capacity is huge. The 800 million tons of production capacity of coal mines under construction will be gradually released. After the illegal coal mines complete the procedures, 600 million tons of production capacity will be released. It will take three years or more to complete the task of reducing production capacity of 800 million tons during the "13th Five-Year Plan" period.
Therefore, the 276 working day system is an important regulatory measure and a capacity reservoir for the coal industry to resolve excess capacity in the “Opinions of the State Council on Resolving Excessive Capacity in the Coal Industry and Realizing Difficulty Development” (Guo Fa [2016] No. 7). It must be strictly enforced without wavering.