Coal prices continue to drop 70% of the losses of coal companies. Will the coal industry be shuffled?

Polaris Thermal Power Network News: After rumors outside the Shenhua Group, five consecutive reductions in thermal coal market prices within half a month, the Shenhua Group recently issued a directive to limit production cuts - this year will limit production of 50 million tons, 60 million tons reduction. Industry commentators commented that as China's largest coal producer and seller, Shenhua Group's move will stir the coal industry to deepen its reshuffle and promote a new round of coal resource integration.
"Reducing the coal price five times in a half month is totally a misunderstanding and misunderstanding of Shenhua by the outside world. In the past, Shenhua coal price was determined based on the Bohai Rim Index, Qinhuangdao listing price, etc., because the market index generally lags behind the market sales price. Therefore, the sales price of Shenhua Coal in the first half of the year has actually been higher than the market price.
At the end of June this year, Shenhua adjusted its pricing strategy and adopted the pricing mechanism of 'Accompanying the market'. It should be said that Shenhua did not take the lead in cutting prices, but rather 'spontaneous market' and coal market prices were equal. This is Shenhua's market behavior based on market rules; The reduction in the production limit is the response of Shenhua in accordance with the requirements of the China Coal Industry Association 'to control total volume and reduce inventory'. Shen Jianhua, director of the news and propaganda department and spokesperson Meng Jian of the Shenhua Group, said in an interview with the reporter that the current coal market has been slow to sell, coal companies are in trouble, and the coal industry has entered a critical period of deep reshuffling and industrial integration.
The loss of coal companies surpassed 70%, and Shenhua even lowered the price of coal. On July 21st, an official of a provincial SASAC complained to Meng Jian: “You Shenhua takes the lead in continuously cutting coal prices. National coal companies are miserable. Our province The days of the coal companies are not going any longer."
It is understood that Shenhua's coal price adjustment began in late June. At 0:00 on June 26th, Shenhua Group announced the adoption of a new coal sales pricing mechanism, thermal coal prices and market price dynamics, of which 5800 and 5500 kcal by 20 yuan / ton, 5200 kcal by 15 yuan / ton, 5000 The kcal is lowered by 10 yuan/ton.
From July 1st on, Shenhua coal prices will adjust with the market price. The price of coal will be settled at the lowest price of the lower limit of the listed price of Qinhuangdao for the entire month. If the monthly average cash price exceeds 90% to 100%, more than 90% will be enjoyed. 5 yuan / ton discount, more than 100% part enjoy 8 yuan / ton discount; July 4th, Shenhua promised no matter what other coal companies to use pricing, Shenhua coal prices will be the lowest price of the same coal market; July 9 On the same day, Shenhua lowered the coal price for the fourth time with a coal market price, and the decline ranged from 15 yuan to 20 yuan per ton range. On July 14, Shenhua again carried out the 5th price adjustment, and the price decline of all varieties of coal was at 5 yuan/year. About tons...
"This time, Shenhua's coal price adjustment is entirely based on the market's behavior and actions. Although Shenhua is the largest coal company in the country, its coal market share only accounts for about 7% of the national coal market, and it is impossible to influence or even affect coal. Market prices. In front of a strong market, what Shenhua can do is 'accompany the market', otherwise it can only be a dead end!” In response to some industry complaints Meng Jian explained, “In the coal market, the coal industry is generally sluggish, There are some complaints in the industry that I fully understand. Who makes you the 'boss'? Actually, the 'boss' is not a good day."
He said that due to the current serious oversupply of the national coal market, Shenhua Huanghua Port has accumulated more than 3 million tons of coal, and there are more than 190 columns of coal trains along the railway line. Many coal enterprises are not allowed to open production or even stop production. Under this circumstance, Shenhua can only implement the "accompanying market" pricing mechanism according to the coal market, that is, refer to the Bohai Steam Coal Index, the Qinhuangdao listing price, and the actual market price of coal in the month to determine the settlement price of Shenhua coal.
A report from the China Coal Industry Association confirmed Meng Jian’s statement. The “Announcement on the Operation of the Coal Economy in the First Half of 2014” published by the Association on July 12th in the industry showed that due to the oversupply of coal, the inventory remained high. As of the end of June, the stock of coal enterprises reached the highest level in history, reaching 9900. Tens of thousands of tons; at the same time, the price of coal has fallen sharply, and the loss of enterprises has further expanded. At present, there are 9 provinces in the whole country that have suffered losses in the entire industry. Twenty companies in 36 large-scale enterprises have suffered losses, nine companies are on the edge of profit and loss, and the country's entire coal enterprises have suffered more than 70% loss.
“Because of the serious losses of coal companies, there are currently more than 50% of the wages of the employees of the enterprises. Some companies have experienced delays in hair growth, hair cuts, and wages.” Wang Xianzheng, president of the China Coal Industry Association, warned that “deductions, Lack of wages can easily lead to ideological fluctuations in staff members and trigger accidents. It is particularly noteworthy that the company’s financial constraints have affected the normal safety production of coal mines.”