Production area Coal supply contracted further, as a few coal mines ran out of coal sales quotas in Ordos, and Liulin of Luliang saw safety inspection intensified at coal sector. Large coal mines focused on long-term contract coal supply and small and medium coal mines witnessed active purchases from portside market and downstream power plants. As such, coal prices went up again.
Northern port Coal stocks at portside market were depleted at a faster pace, resulting from subdued production at production regions and low railing capacity impacted by recent heavy rainfall. High daily consumption still supported high prices at portside market.
Import market Downstream buyers were active in inquiry, but were unwilling to accept the high prices and bid failures appeared frequently. Some traders reckoned that coal prices of seaborne import cargoes were hard to decline, given low stocks at downstream plants and limited seaborne cargoes. Indonesian 3,800 Kcal/kg NAR was offered at $69-70/t FOB, on Supramax basis.
Coking coal prices moved up higher at production regions. The low-sulfur primary coking coal gained 50 yuan/t to 2,550 yuan/t and auction prices also saw some notable rise in Anze of Linfen. Some coking coal mines switched to produce thermal coal in response to the thermal coal-ensuring call by National Development and Reform Commission. Coking coal enjoyed good sales amid tight supply, and prices are likely to go upward further.
The number of trucks that cleared customs at Ganqimaodu border crossing picked up to 98 on July 21, but trading activities were tepid due to limited resources.
Expectation for tight coke supply strengthened, as some coking plants cut production by 20-30%, pressed by frequent environmental inspections. Grade I and Quasi Grade I coke stocks were at low levels, while high-sulfur coke and chemical coke stocks piled up at coking plants. Surging costs of feed coal greatly reduced coke margin, and some coking plants have already reported losses. Participants reckoned that coke prices are unlikely to slump quickly, and some coke plants showed resistance to the second round of prices cut.
(Writing by Lilya Li Editing by Tammy Yang)
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