Sxcoal Issue 30# | China thermal and coking coal move lower
China portside thermal coal market continued to face downward pressure, coking coal market turned cautious amid downstream fluctuations.
Thermal Coal
Portside Market: Thermal coal prices continued to decline at northern China ports, due to increased stockpiles and weak demand. Sellers lowered prices in response to high inventory levels and lackluster inquiries. Coal stocks at Qinhuangdao port surged by 10.55% week on week and 28.16% month on month, reaching the highest of the year.
Price Trends: The Fenwei CCI index for 5,500 Kcal/kg NAR domestic spot coal stood at 853 yuan/t FOB northern China ports with VAT, down by 2 yuan/t week on week. Imported thermal coal prices also declined slightly, with the Fenwei CCI 5500 Import index standing at $103.6/t, CFR southern China ports, falling $1.9/t from the previous week
Market Sentiment: Overall buying sentiment remained cautious, with high coal stocks and limited improvement in coal burns at power plants restraining the overall release of demand. Some sellers may continue to face difficulty in reaching deals, with moderate downward adjustments still likely to occur.
Import Market: Imported thermal coal prices fell further, driven by inactive tendering activities from Chinese power utilities and increased cautiousness among traders. Chinese traders became more cautious in bidding for utility tenders and increased their prices in response to higher costs due to the depreciation of the Chinese yuan against the dollar.
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 weakened last week, with coke and steel producers making only necessary purchases and middlemen reducing procurement. This has led to increased inventory pressure at some coking coal mines, resulting in price cuts of 30-50 yuan/t.
Supply and Demand: Some coking coal mines have slightly reduced production as they approach annual targets or due to weak spot demand. Mines that had halted or capped production due to longwall changes restarted, increasing overall supply. Despite this, coking plants are maintaining low coal inventories to avoid risks, leading to a decrease in coking coal offtakes.
Inventory: Coking coal stocks at 100 surveyed coking plants could sustain 6.24 days of usage, down from the previous week. Raw coking coal stocks at surveyed mines increased by 3.16% week on week to 2.94 million tonnes as of November 6, while washed coal stocks rose by 4.13% to 2.19 million tonnes.
Prices: Coking coal prices decreased in most parts of Shanxi. Online auctions saw more price reductions, with one miner auctioning 30,000 tonnes of low-sulfur coking coal at 1,560 yuan/t, about 5 yuan/t lower than the last trade.
Mongolian Coal: Mongolian coal inflows at China's Ganqimaodu border port remained high, with daily customs clearance averaging 1,050 trucks. However, due to market uncertainties and poor steel sales, transactions were sparse, leading to a drop in Mongolian coal prices.
Seaborne Imports: In the seaborne import market, international traders began purchasing after a week of hesitation, leading to a rebound in Australian coal transaction prices. However, domestic end users showed little buying appetite due to limited arbitrage room. Futures prices fluctuated downwards, and with the second coke price cut materializing, coke and steel producers were hesitant to place orders.
More details in our latest weekly coking coal review, incl. our weekly survey on coking coal mines, market dynamics, etc. »CLICK HERE