中文
China's domestic thermal coal market saw a sluggish start to the week, accompanied by looming downward risk for prices amid a lack of buying strength from end users and continued accumulation of inventories at northern ports.
On October 23, the benchmark 5,500 Kcal/kg NAR thermal coal was offered at 990-1,020 yuan/t FOB with VAT, offers for 5,000 Kcal/kg were 870-900 yuan/t, and 4,500 Kcal/kg NAR stood stable at 730-760 yuan/t. They were basically flat or marginally lower compared with late last week.
Traders intended to maintain their offer prices steady, banking on potential cost support from production areas, which, however, appeared insufficient to counter the prevailing lack of buying enthusiasm among downstream users.
The trading activities were relatively weak amid considerable buy-sell spread, as end users continued to press down prices, but offers of high-quality supplies remained quite firm.
"The absence of significant purchases from large power plants has made it challenging for traders to hold onto their prices, while the fast-rising coal stocks at northern ports has further added to a negative outlook," said one Tianjin-based trader.
He confirmed offers of 5,000 Kcal/kg NAR coal with 0.8% sulfur at about 885 yuan/t, and also heard bidding prices for utility's tender seeking 4,500 Kcal/kg NAR coal at as low as 725 yuan/t.
This was echoed by a second trader source, who noted "some demand in the market but not substantially strong". He refrained to lower prices, counting on the support from the recent pickup of a few offer prices of mine-mouth thermal coal and the continued lack of profitability to ship coal to northern ports.
The source offered low-sulfur Mongolian 5,000 Kcal/kg NAR coal at 900 yuan/t, FOB with VAT, and turned down negotiations over lower prices, even though no deal was concluded at the level.
Offers of 5,500 Kcal/kg NAR coal were heard at 1,040 yuan/t FOB with VAT at ports along the Yangtze River, according to a Jiangsu-based end user. He foresaw prices to further dip in the near future, citing thickened prudence among buyers, especially as the port-side coal availability continues to improve.
With Daqin railway's coal delivery resuming fast to about 1.28 million tonnes just days after it concluded the autumn maintenance, the growth of port-side coal stocks also accelerated.
On October 23, coal stocks at three major Bohai-rim ports (Qinhuangdao, Caofeidian and Jingtang) totaled 24.25 million tonnes, up 7.2% from a week ago. But the vessels waiting for loading were comparatively lower compared with the previous week, Sxcoal's data showed, indicating continued lukewarm demand from the downstream.
On October 23, the CCI index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was assessed by Sxcoal at 1,010 yuan/t FOB with VAT, down 3 yuan/t from late last week; 5,000 Kcal/kg NAR coal assessment was at 889 yuan/t, down 7 yuan/t, and that for 4,500 Kcal/kg NAR at 743 yuan/t, unchanged compared with October 20.
Prices mixed in production areas
Thermal coal prices were mixed in key production areas, with some miners raising prices after their previous price cuts attracted more trucks coming for loading but some others making downward corrections in response to thickened wait-and-see sentiment among buyers.
Some miners in Yulin and Shenmu of Shaanxi were moderately optimistic over the market, partly owing to their low inventory levels. One Shenmu-based miner raised prices of 5,900 Kcal/kg NAR slack coal with 0.3% sulfur and 6,200 Kcal/kg NAR lump coal by 10 yuan/t to 890 yuan/t and 1,000 yuan/t, mine-mouth with VAT.
Several miners in Orders of Inner Mongolia raised prices by 5-10 yuan/t during the weekends backed by increased trucking activities. However, this has not led to a wide upward trend in prices as a sense of caution still prevails among buyers. In fact, small price cuts were also heard at some mines in the region at the start of week.
Participants viewed the latest price rises as part of corrections made mainly by miners that had previously cut price significantly.
(Writing by Emma Yang Editing by Harry Huo)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.
