Thermal coal prices generally leveled off this week in northern China's leading production base Shanxi province. Most miners were still bullish on the near-term market while some considered the prices had reached the top and lacked impetus to go up further.
A Datong-based miner said some mines would be ordered to stop production before and during the 19th CCP National Congress for safety concerns, which is due to commence on October 18.
Reporting good sales, the miner said his mine stopped production for environmental issues and is now selling stocks.
He offered 4,600-4,800 Kcal/kg NAR coal with 0.6% sulfur at 315 yuan/t mine-mouth without VAT, flat from the week prior.
A producer from Xinzhou said prices were less likely to go down given pre-winter restocking from utilities.
"We have been keeping low stocks for nearly two months, and I think supply could not be higher in the coming winter when environmental inspections become stricter," he said.
"Coal prices are not likely to move down, due to insufficient supplies in the traditionally peak consumption season," he predicted.
The miner sells most of his coal outside by railways. Price of the 4,800 Kcal/kg NAR coal with 2.5% sulfur reached 385 yuan/t, FOB basis without VAT, also unchanged from a week ago.
"We mainly supply the fuel for utilities that signed long-term contracts with us," he added.
A Shouzhou-based miner, however, believed thermal coal prices have reached the plateau. "Coal prices have been stable for weeks despite low stocks," he noted.
"The recent NDRC policy for utilities to increase coal stocks can be read as a signal that more measures will be issued to stabilize spot prices," he added.
On September 1, Fenwei assessed Datong 5,500 Kcal/kg NAR coal at 450 yuan/t, mine-mouth basis with 17% VAT; that of Shuozhou 5,000 Kcal/kg NAR coal at 385 yuan/t; 5,800 Kcal/kg NAR raw coal at 670 yuan/t in Changzhi, all unchanged from the week before.
(Writing by Alex Guo Editing by Harry Huo)
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