China thermal coal prices continue to tick up at N. ports

2017-12-01 17:09:00 Price

Spot thermal coal prices continued to move up at China's northern ports, underpinned mainly by a lack of supply resulting from tight rail wagons.

"Coal prices are climbing rapidly at northern coastal market, as spot cargoes remain in severe shortage currently," said a Hebei-based trader, adding offer prices of 5,000 Kcal/kg NAR coal rose to 605-610 yuan/t FOB.

An Inner Mongolia-based trader also reported a supply crunch at Jingtang port, bolstering offer prices for 5,000 Kcal/kg and Shaanxi 5,800 Kcal/kg NAR coals up to 610 yuan/t and 730 yuan/t FOB.

"I prefer to suspend purchases for the time being, considering the spot market remains in volatility now," he noted.

Coal stocks were less than 1 million tonnes at Coal Wharfs 36-40 of Jingtang port, according to a second trader from Hebei. And, 70% of the stocks had already been booked, leaving small amount of spot coal at the port, he added.

"Coal inflows via rail wagons are actually at normal levels, yet more coal is being shipped out of the port," he pointed out.

Offer price for Inner Mongolian 5,500 Kcal/kg NAR coal climbed above 690 yuan/t FOB, while that of 5,000 Kcal/kg NAR coal generally at 610 yuan/t or even higher at 615 yuan/t FOB for some premium material, said a second trader from Inner Mongolia.

He voiced optimism about the future market, expecting 5,500 Kcal/kg NAR coal price to exceed 700 yuan/t FOB.

Regarding the shortfall at northern ports, a central China-based trader disclosed that railways have been basically running full capacity this year, and the diesel truck ban at Bohai-rim ports since end-September brings more pressure on rail transport.

"It is also the reason for the divided price trends at production regions and coastal market now," he noted.

A Tianjin-based trader said coal prices were stable at production bases. When it came to the red-hot coastal market, he noted the uptick may last for two weeks owing to severely tight rail capacity.

"Prices are still on the decline now in Inner Mongolia, though some rises are also seen at some mines, with mine-mouth prices of 5,500 Kcal/kg NAR coal at 360-370 yuan/t," said a port-based trader.

A Shanxi-based trader reported a roughly stable market at ports along the Yangtze River, with slight pickups observed.

"Previous downturn forced many traders to cut price of 5,500 Kcal/kg NAR coal to 750 yuan/t from 800 yuan/t FOB, which attracted mane utilities to restock," he noted.

The 5,500 Kcal/kg NAR coal was offered at 770 yuan/t FOB at ports along the Yangtze River, and it could be concluded at 765 yuan/t FOB, according to the trader.

On December 1, the Fenwei CCI Thermal index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was assessed at 689 yuan/t FOB with 17% VAT, rising 1 yuan/t day on day and up 15 yuan/t week on week.

The Fenwei CCI Thermal index showed domestic 5,000 Kcal/kg NAR coal increased 2 yuan/t from a day ago to 610 yuan/t FOB with VAT on the same day, which was up 21 yuan/t from the week-ago level.  

(Writing by Jessie Jia   Editing by Harry Huo)
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