Coal-Based PE Profit may Pick Up
The upstream coal prices kept going up, lending more support to the PE market from the cost side. Although the spot price went up, the rise was less than that in the feedstock market. The gross profit at coal-based PE enterprises once fell near negative values.
The upstream steam coal market stayed at high levels. In terms of production area, China’s domestic coal mines are more cautious in production. To ensure safety, most coal mines have no incremental production plan, and the output in local areas dropped due to the tight availability of coal management tickets. The downstream demand was healthy, so the production and sales at most coal mines were balanced. Recently, the supply of coal tightened. The EXW price of steam coal was high, so the shipping cost of coal at ports remained high. At the same time, some coastal power plants had low inventory, and the coal price at ports continued to rise.
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