Mine-mouth prices of thermal coal stayed in a weak run in China's major production regions, affected by poor demand from well-stocked end users. Traders' negative attitude towards new orders also fueled the bearish sentiment in the market.
Slack coal sales remained tepid at some regions in Shaanxi province, even after miners lowered offers. Miners in the province widely took a dim view about the situation in the near future.
One Yulin-based miner reported low sales despite after cutting price by 20 yuan/t to 440 yuan/t for the 6,400 Kcal/kg NAR slack coal with 0.54% sulfur, mine-mouth with VAT.
A Shenmu-based miner reduced the mine-mouth prices by 40 yuan/t from mid-October's 390-400 yuan/t for the 0.8% sulfur slack NAR coal with CV of 6,000 Kcal/kg and above, 17% VAT excluded.
"But our sales can never say good," the miner said. "Our partner utility in Shandong insists in a purchase standard of 0.12 yuan/t per Kcal/kg." The standard can be translated at 600 yuan/t for the 5,000 Kcal/kg NAR coal, DDP with VAT.
A Fugu-based miner reduced 20 yuan/t for the 4,400 Kcal/kg NAR coal with 0.3% sulfur to 280 yuan/t, mine-mouth basis with VAT.
"Our sales aren't so bad now," he said. "Stocks have been sold out."
He added road freight rates from Shenmu to Wuzhai, Shanxi province remained at 70 yuan/t, where their cargoes are shipped to northern ports via railway.
A miner in Tongchuan, whose products are mainly sold to power plants, pegged price of the 4,500 Kcal/kg NAR slack coal with 0.5% sulfur at 342 yuan/t and 30-80mm lump coal at 450 yuan/t, mine-mouth basis with VAT.
"We don't produce much now because utilities think our offers are too high to accept," he added.
By November 23, 198 of the 451 coal mines were in normal operation in Shaanxi. Total output of the province stood at 36.17 million tonnes over November 1-23; sales at 35.13 million tonnes and stocks at 1.98 million tonnes.
Having made a concession of prices, miners in Ordos, Inner Mongolia still complained low appetite and price squeeze from end users.
"Local miners basically cut slack coal prices by 15 yuan/t, but it helps little to boost sales," said an Ordos-based miner. He said the 6,100 Kcal/kg NAR washed coal with 1.8% sulfur was offered at 403 yuan/t ex-plant with VAT.
In Shanxi, miners generally maintained prices stable with low coal in stock. A miner in Shuozhou offered 0.6% sulfur washed slack coal with 5,000 Kcal/kg NAR at 355 yuan/t and 0.6% sulfur type at 345 yuan/t, both on ex-plant basis without VAT.
On November 29, Fenwei CCI 5500 spot index was assessed at 683 yuan/t, FOB with VAT, 13 yuan/t higher than the week-ago level.
During the same day, price for Ordos 5,500 Kcal/kg NAR coal was assessed at 375 yuan/t, down 7 yuan/t from a week ago; price for Yulin 5,800 Kcal/kg NAR coal at 421 yuan/t, down 13 yuan/t from the week prior; that of Datong 5,500 Kcal/kg NAR coal at 455 yuan/t, unchanged on the week, all on mine-mouth basis with VAT.
(Writing by Jessie Jia Editing by Harry Huo)
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