China's leading coal miner Yangquan Coal Industry Group lowered FOB prices of thermal coal at northern ports by 15 yuan/t effective January 10, its sales company said in a statement on the same day.
While stabilizing long-term contract prices, Yangquan Coal will take the lead in reducing prices of seaborne-traded power generation coal by 15 yuan/t, the statement said.
It didn't specify if the price cut is for spot coal or not. Industry insiders said it could be applied to spot coal sold to long-term buyers, given the current tightness of supply in the market.
As a responsible large state-owned company, Yanquan Coal will strictly carry out the annual long-term supply contracts to ensure stable supply to power plants and help maintain market stability, it said.
No similar price cut is announced by other state-owned miners as of time of publication.
Insiders say others are likely to follow suit, given the government's stance in keeping the market stable in the peak winter heating season.
Persisting supply crunch, mainly due to a lack of rail capacity, and strong demand from utilities, has pushed spot thermal coal prices at northern ports.
On January 10, the Fenwei CCI Thermal index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was assessed 5 yuan/t higher on the day at 730 yuan/t FOB with 17% VAT, up 19 yuan/t week on week.
Domestic 5,000 Kcal/kg NAR coal was assessed 3 yuan/t higher than a day ago at 653 yuan/t FOB with VAT on the same day, which was up 15 yuan/t from the week-ago level.
(Writing by Alex Guo Editing by Harry Huo)
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