Fenwei: China's thermal coal price lacks strength to go up further

sxcoal.com Viewpoint,  Price,  Ports,  Thermal Coal 2018-05-02 18:25:00

While China's thermal coal price picked up from mid-April, spurred mainly by restrictions on coal import at some eastern and southern ports, it remained lack of strength to go up further, according to the latest report Fenwei Coal Weekly Update released by coal consultant Fenwei Energy Information Services.

 

Fenwei CCI spot index for the 5,500 Kcal/kg NAR thermal coal rebounded from 569 yuan/t on April 16 to 597 yuan/t on April 25, but decreased to 594 yuan/t a day later and kept stable in the rest of the month.

 

Starting from April 1, China adjusted down power price by 10% for general commercial and industrial sectors to lighten their burden. Fast-growing coal price apparently came against the big picture.

 

Market sources said the National Development and Reform Commission held a meeting with officials of local coal departments of Shanxi, Shaanxi and Inner Mongolia as well as leaders of major coal enterprises and ports on April 28, saying it would't intervene in coal price but hoped "it came back to reasonable range as soon as possible".

 

Fenwei analysts analyzed although there were signs that price rise started spreading to production bases from ports, major end users – coastal power plants – were yet to make any purchase moves beyond what was absolutely necessary to sustain operations.

 

Fenwei monitoring data showed stocks decreased 81,000 tonnes to 1.12 million tonnes last week at 53 surveyed coal mines across the country, indicating sales increased slightly from a week ago.

 

But capacity utilization rates at surveyed mines in Shanxi and Shaanxi averaged 107% last week, down 9.2 percentage points on the week. It seemed that miners were still wary about the market, with caution in production.

 

Currently, coal consumption at coastal power plants remained as stable as 650,000-700,000 tonnes, almost unchanged since late March. By May 2, daily consumption of the six major coastal utilities totaled 657,000 tonnes, lagging behind 703,000 tonnes on April 28.

 

The combined stocks decreased to 19 days in late April but came in at 20 days again on May 1 and 2, a rather high level that was enough to hold back purchase.

 

Stocks at ports decreased last week. By April 27, the four major northern ports – Qinhuangdao, Jingtang, SDIC Caofeidian and Huanghua – saw their combined stockpiles total 15.36 million tonnes, slightly easing from 15.31 million tonnes a week ago; stocks at Guangzhou port down 0.16 million to 2.18 million tonnes.

 

However, the five major ports along the Yangtze River, more close to the southern and eastern consuming regions, increased 0.12 million to 3.81 million tonnes. The figure may explain further that coastal utilities were yet to crank up large purchase. Stock that declined at northern ports seemed flow more to traders rather than end users.

 

Sales of thermal coal have recently encountered resistance at ports along the Yangtze River and traders there accelerated shipments by offering discounts.

 

In general, sentiment may not be a persistent force to drive the market further and hydropower, though still weak at present, is gradually increasing and will dent coal consumption in the future.

 

For coking coal market, the spot price was still under pressure as supply-demand fundamentals remain weak.

 

According to Fenwei monitoring data, capacity utilization averaged 74.9% at surveyed coking plants last week, down 0.1 percentage point on the week; raw coal stocks increased 274,000 tonnes to 3.9 million tonnes at surveyed mines.

 

Poor sales and high stocks limited production, with raw coal output down 18,000 tonnes to 6.8 million tonnes at the surveyed mines; capacity utilization averaged 116%, dipping 0.3 percentage point.

 

By May 2, Fenwei CCI Liulin low-sulfur and high-sulfur indexes were assessed at 1,580 yuan/t, both on ex-plant basis with VAT, flat week on week.


To know more about the Fenwei Coal Weekly Update, please contact us directly via inquiry@fwenergy.com


(Writing by Alex Guo  Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 Weekly global coal market news summary (Jan 14 – Jan 18) 2019-01-18

India's ECL output at 33 mln T during Apr-Dec FY2018-19 Eastern Coalfields Ltd (ECL), a subsidiary of Coal India, said on January 17 it produced 32.9 million tonnes of coal in the first thre

2 China on track to cut steel asset-liability ratio to below 60% 2019-01-18

China is on track to further reduce the asset-liability ratio in its steel industry, which stood at 65.74% as of end-November last year, according to an industry meeting held on January 14.

3 China Coal Daily Track (Jan 18) 2019-01-18

Thermal coal Domestic market Production area More mines in Yulin city of Shaanxi were ordered to halt production for safety checks, and most mines were mainly selling stocks. Miners frequ

4 Thoughts about Chinese Shenmu coal accident 2019-01-18

One deadly coal mine accident in northwestern China's Shaanxi province on January 12, which took away 21 lives, has shocked the entire market. Beyond sorrow and regret, there are many aspects we sh

5 Traders divided on China's pre-holiday thermal coal market 2019-01-18

Participants in Chinese spot thermal coal market were divided in the short-term outlook before the Spring Festival holiday, with some holding back on sales anticipating strong pickups while the others

6 Market hype helps push up Indonesian coal prices, traders 2019-01-18

Indonesian coal prices have risen visibly in recent days, and some Chinese traders deemed it unreasonable, in spite of multiple positive factors including heavy rain that has affected local production

7 China Dec power coal price index overview 2019-01-18

China's monthly-issued price index of power coal staged a year-on-year decline of 2.61% in the last month of 2018, which was still 0.41% higher compared with the November level, showed data from the s

8 China 2018 solar curtailment rate declines to 3%, NEA 2019-01-17

China's solar power electricity could be 97% utilized in 2018, and only 3% of the total generation was idled, showed data from the National Energy Administration, down 2.8 percentage points from a yea

9 China Coal Daily Track (Jan 17) 2019-01-17

Thermal coal Domestic market Production area Thermal coal prices continued rising at major production areas. A large numbers of coal mines in Shenmu and Fugu of Shaanxi halted produc

10 CHN Energy lowers spot coal prices by 1-11 yuan/t, sources 2019-01-17

China Energy Investment Corporation (CHN Energy), the nation's top coal miner, reduced its spot prices of thermal coal for the week ending January 21 by 1-11 yuan/t, a pullback from price hikes in the

Most Read Articles

1 China's spot thermal coal prices may head down as port demand drops 2019-01-09

China's spot thermal coal prices might head down in a short term as the downward spiral of port transaction and sagging demand from end users unleashed bearish sentiments among traders for future mark

2 Mongolia's coal exports hit all-time high in 2018 2019-01-07

Mongolia's coal exports hit an all-time high in 2018, the country's finance ministry said on January 4. The landlocked Asian country exported a total of 36.5 million tonnes of coal in 201

3 Chinese thermal coal lacks strength to keep rising, traders 2019-01-08

Chinese thermal coal prices may lack sustained momentum to go up further, traders said, although cargoes settled and offered at northern ports continued edging up on January 7. This was m

4 Newcastle coal price to decline 30% by 2020 2019-01-08

Asia-Pacific benchmark Newcastle coal prices could decline by around 30% by 2020, from 2018 average levels, as Chinese import demand cools, an Australian government report said. The Newca

5 China's import thermal coal market may cool down, traders 2019-01-10

China's import thermal coal market is likely to cool down after utilities finish their buyings, yet prices may not fluctuate sharply, trade sources said. Some Chinese utilities have issue

6 China spot thermal coal market ends 10-day price rebound 2019-01-10

There are some odds that recent price rebound of thermal coal starting late December may come to end at northern China's Bohai-rim ports, as traders scrambled to sell amid weakening demand before the

7 S. Africa Nov thermal coal exports hit one-yr high 2019-01-07

South Africa's thermal coal exports reached 7.92 million tonnes in November, hitting a new high since November last year, showed customs data. The November tonnage was basically unchanged

8 Wide price drops hit China's coking coal market 2019-01-07

China's coking coal market was hit by widespread price drops in the past week, as prices of raw coking coal declined with the decrease of washed products in main-producing bases, under the bleak outlo

9 China coastal thermal coal market struggles again after brief bounce 2019-01-11

China's coastal thermal coal market lost strength after over one-week rebound, and the rate of decline seemed speeding up along with dwindling demand. On January 10, the Fenwei CCI index

10 Chinese thermal coal extends weakness as traders rush to dump cargoes 2019-01-11

Chinese thermal coal prices continued losing ground at northern transfer ports, partly due to some traders' de-stocking activities aimed to shun costly storage fees and financial expenses.

Scan to download sxcoal.com mobile APP

X