中文
Huaibei Mining Holdings Co., Ltd., a major Chinese coal producer, sells all of its thermal coal to power plants in its home province of Anhui under long-term agreements, the company told investors during their visiting.
The company prices its thermal coal using a "benchmark +floating" mechanism. The benchmark is set at 675 yuan/t based on 5,000 Kcal/kg NAR coal. The floating price is then adjusted monthly based on indices, said the miner.
Currently, Huainan's thermal coal price under long-term contracts averages 710 yuan/t, with VAT, for coal ranging from 4,500 to 5,000 Kcal/kg NAR.
The company is also engaged in coking coal used for steelmaking. Huainan noted demand from the steel sector was resilient in the first quarter of this year, but failed to increase in the second and third quarters, typically the peak season for the sector, leading to some downward pressure on oking coal and coke prices.
Demand for coking coal was less seasonally volatile this year compared with last year, from the prospective of steel production, which has maintained high and steady, it said.
In January-October, China's crude steel production rose 5.42% from the same period of 2022, and the apparent consumption rose 2% year on year, Huainan said, quoting official data.
The increase in demand is mainly driven by soaring exports. China exported 74.73 million tonnes of finished steel over the period, soaring 34.8% year on year.
The company expected the demand for coking coal in 2024 to be generally on par with this year, as China's domestic steel demand is hard to increase while the world would continue to increase steel consumption.
For coking coal long-term contract price, the company said the broader economy is turning around as the Fed is trying to stop raising interest and may probably start to cut interest. "The improvement in the economy would boost energy demand, supporting coking coal long-term contract prices in the future," the company added.
Huainan also provided update on some of its mine projects, including the ongoing construction of the Taohutu mine slated for completion by late 2025.
(Writing by Alex Guo Editing by Harry Huo)
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