Factor Analysis And Trading Strategies Affect Coal Prices

Coal is the fundamental and strategic resource of Chinese national economy. Thehealthy development of coal industry is of great significance to ensure the steadydevelopment of economic society. Since the reform and opening up, China hasexperienced the development process from the planned economy to the marketeconomy. With the development of market economy, the coal price has graduallytransferred from "planned price" to the double-track pricing, and then to single“market price”. Thus we can say, the formation mechanism of coal price has asignificant impact on the price of coal. Through analyzing the formation mechanismof domestic coal price, this paper points out some problems of the coal priceformation mechanism, and puts forward the policy suggestions to the construction of areasonable coal price mechanism.With the development of economy and the progress of society, new changes haveoccurred in the factors affecting coal price, showing some new features. Energysaving and environmental protection, expansion of natural gas, solar and wind power,and reduction of energy consumption have become the new trend of socialdevelopment, which have a more and more important impact on coal price. This paperanalyzes the factors influencing coal price, including the development status ofnational economy, the production cost of coal, coal production volume, coalconsumption, coal stocks, coal import and export volume, the international energyprices, transport capacity of coal, demand for the downstream industry of coal, thenational policy, and the development situation of coal alternative energy.In the face of the changing coal price, this paper constructs the framework ofcoal price analysis, aiming to grasp the latest situation of the development of coalindustry through tracking the data signals which reflect the supply, demand and costof coal, such as quantity, price and inventory. Based on analysis of the coal price, thispaper summarizes some strategies of coal investment and trading. The strongperiodicity of coal industry also determines the strong trend of coal price and coal stock price. In terms of coal stock investment, this paper summarizes that the coalstock index will change ahead of spot coal price. Whether investment in coal stockscan obtain excess profits mainly depends on the expectation of market liquidityoverflowing and future coal price increasing. Therefore, it is not proper to invest incoal stocks since the country starts to tighten liquidity. In terms of coal futures priceinvestment and transactions, this paper summarizes that the covered-interest arbitrageshould be carried out by utilizing the dull season and boom season of steam coal andcoking coal. In addition, from the angles of coal production enterprises, coal-demanddownstream enterprises and intermediate traders, the paper analyzes the necessity ofenterprises to carry out hedging with futures, as well as the management of hedging ofenterprises’ production, operation, sales and inventory by using steam coal and cokingcoal futures, thus reducing the risks of coal price fluctuation.