Sxcoal Issue 29# | China thermal coal lacks resilience; coking coal cautious
China portside thermal coal market continued to face downward pressure, coking coal market turned cautious amid downstream fluctuations.
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Thermal Coal
Portside Market: The portside thermal coal market in China continued to face downward pressure as sluggish sales and increasing inventory prompted traders to lower prices to attract buyers. Following the completion of Daqin railway maintenance and ongoing transportation discounts, coal inflow to northern transfer ports has exceeded outflow, leading to stock accumulation.
Price Trends: The Fenwei CCI index for 5,500 Kcal/kg NAR domestic spot coal stood at 855 yuan/t FOB northern China ports with VAT, falling 3 yuan/t week on week. Imported thermal coal prices also declined slightly, with the Fenwei CCI 5500 Import index standing at $105.5/t, CFR southern China ports, falling $0.3/t from the previous week.
Market Sentiment: The market sentiment was cautious with power plants exhibiting a wait-and-see attitude due to high stocks and restrained consumption. Participants expected the further downward space to be small given rebounding demand approaching the peak demand month in winter when renewables, particularly hydropower, encounter their seasonal weakness.
Import Market: Imported thermal coal prices moderately weakened last week, driven by the continued pressure from some power utilities who only sourced low-priced cargoes with limited urgency in demand. Participants expected low-CV coal prices to move sideways, with its price advantage keeping attracting Chinese buyers.
More details in our latest weekly thermal coal review, incl. our weekly survey on thermal coal mines, market changes and updates on coal consumption in domestream sectors. »CLICK HERE
Coking Coal
Market Overview: China's coking coal market remained range-bound last week, with initial improvements in macroeconomic expectations and increased demand for low-priced cargoes slightly alleviating bearish sentiment. However, as futures and spot steel prices declined, coke and steel producers reduced purchases, leading to a cautious market stance.
Supply and Demand: Production at some coking coal mines declined due to underground issues, resulting in a slight overall supply contraction. Despite this, most mines faced no inventory pressure and maintained stable prices. Coking plants focused on reducing coking coal inventory, with only a few making small, on-demand purchases.
Inventory: Coking coal stocks at 100 surveyed coking plants could sustain 6.41 days of usage as of October 30, up 0.19 days from the previous week. Stocks at surveyed mines stood at 2.85 million tonnes as of October 30, down 0.35% on the week, while washed coal stocks increased by 0.18% to 2.09 million tonnes.
Prices: Coking coal prices weakened in most parts of Shanxi, with significant price drops observed in online auctions. In Inner Mongolia, low-sulfur fat coal prices fell by 10 yuan/t to 1,360 yuan/t on October 31, a total reduction of 110 yuan/t since October. In Shandong, prices for washed gas coal decreased by 30 yuan/t to 1,240 yuan/t.
Mongolian Coal: Mongolian coal inflows at China's Ganqimaodu border port remained high, with daily customs clearance averaging 1,140 trucks over October 28-31, down 48 trucks week on week. Prevailing prices for Mongolian 5# raw coal were 1,150-1,170 yuan/t, ex-stock Ganqimaodu with VAT, falling 10 yuan/t from the previous week.
Seaborne Imports: Australian hard coking coal transaction prices slightly rose to $205.7/t FOB in the middle of the week, up $6.7/t week on week, or about 1,808 yuan/t CFR China with VAT. However, offer prices for Australian coal at Chinese ports declined after initial rises during the week due to macroeconomic uncertainty and fluctuating futures prices. Spot offers for Australian hard coking coal stood at 1,720-1,750 yuan/t late last week.
More details in our latest weekly coking coal review, incl. our weekly survey on coking coal mines, market dynamics, etc. »CLICK HERE