Supply of spot thermal coal was still in tightness at northern China ports, causing loading delays and buoying prices of the power generation material.
Low availability of spot coal at northern ports was partly due to tight rail capacity, said a Hebei-based trader. Offer prices were heard at 710 yuan/t and 640-645 yuan/t FOB with VAT for 5,500 Kcal/kg and 5,000 Kcal/kg NAR coal, he noted.
One Inner Mongolia-based trader confirmed shortness of rail wagons and said it may not be eased soon. He added the future market would largely depend on the extent of utility restocking.
Prevailing offer prices for 5,500 Kcal/kg NAR coal ranged from 710 yuan/t to 715 yuan/t FOB with VAT, he added.
Limited rail wagons were allocated to deliver coal from mines to Qinhuangdao port these days, said a Liaoning-based trader, noting half of anchoring vessels were waiting to load coal produced by the country's second largest coal miner – China National Coal Group.
"Impacted by wagon shortage, we just delivered two-train coal to Caofeidian last month, and now stocks are less than 2 million tonnes at the port," said a Shanxi-based trader. He assumed domestic prices may extend uptrend into mid-January, before a possible retreat resulting from concentrated import coal arrivals.
Trade price for 0.3% sulfur Shaanxi 5,500 Kcal/kg NAR coal, previously heard at 708 yuan/t, has climbed above 711 yuan/t, yet no spot material was available, he added.
Currently traders had few spot coal for sale at Caofeidian port, said a Tianjin-based trader, highlighting tightness of supply in the spot market.
Market players expected more rail wagons to be allocated this month to boost supply to northern ports, the trader said.
"Utilities still suffer low coal stocks and may continue to replenish stocks, so spot prices will remain firm in January," he pointed out.
One Jiangxi-based trader said he hasn't bought any spot coal but took some term contract material. "Coal handling is heavily disrupted at Bohai-rim ports; it seems weird utilities don't rush to grab spot cargoes, maybe awaiting term contract or import coal."
"As we settle accounts at the year end, we have done little trades," said another Inner Mongolia-based trader. Many utilities were waiting for coal loadings at northern ports, which may send price higher from current 710 yuan/t for 5,500 Kcal/kg NAR material.
"In March, most traders could embrace some turnaround, before that the market may not be very upbeat, said another Tianjin-based trader.
The trader, who offered single-mine Shanxi 0.8% sulfur 5,500 Kcal/kg and 5,000 Kcal/kg NAR coal at 710 yuan/t and 639 yuan/t, noted increased buying interest in 5,000 Kcal/kg and 4,200 Kcal/kg NAR coals.
On January 2, the Fenwei CCI Thermal index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was assessed at 709 yuan/t FOB with 17% VAT, rising 1 yuan/t day on day and up 4 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 638 yuan/t FOB with VAT on the same day, which was up 6 yuan/t from the week-ago level.
(Writing by Jessie Jia Editing by Harry Huo)
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