China's key coal-dedicated backbone Daqin railway witnessed a solid increase in coal shipments last month, but its help to ease the domestic coal supply tightness is still limited.
The heavy-haul railway, connecting China's northern production base Shanxi to Qinhuangdao port, delivered an average of 1.25 million tonnes a day over November 1-26, up 7.1% compared with the year-ago volume, according to state media Xinhua News Agency.
The railway's daily shipments averaged 1.06 million tonnes in October, its operator Daqin Railway Co., Ltd. said on a performance report on November 9. The company hasn't yet issued data for November's operation.
The rise in Daqin's shipment last month didn't actually help to build up coal stocks at Qinhuangdao port, a key indication to reflect the domestic supply situation.
As of November 30, coal stocks at Qinhuangdao totaled 5.06 million tonnes, almost flat from 5.03 million tonnes at the beginning of the month. The figure has been almost below 5.1 million tonnes throughout the month except a few days surpassing a little. Compared with the same period last year, the stockpiles were over 1 million tonnes less.
As the temperature is much colder than winters in the past few years, inland power and heating plants are actively restocking. A large number of cargoes consequently are directly delivered to power plants along the railway.
Coupled with curbed production in major production areas due to environmental and safety checks, and previous restrictions on coal imports, the overall supply has been in shortage for months.
Now the supply tightness has driven up the spot thermal coal to a new high. On December 1, Fenwei CCI 5500 index for domestic 5,500 Kcal/kg NAR coal was 639 yuan/t, a new record since early March 2019. The index has been rising for seven days in a row.
(Writing by Rebecca Liu Editing by Harry Huo)
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