Thermal coal supply was still in tightness at production areas, as more coal mines in Ordos of Inner Mongolia halted production due to a lack of coal sales quotas. Thermal coal prices continued to rise, with some miners in Yulin, Shaanxi province, largely increasing auction prices after the local government lifted price caps.
Outbound shipment was restrained as state-run miners focused on mid- and long-term contract coal buyers. Traders and end buyers were active in purchases, and small- and medium-sized mines saw long queue of coal trucks. There was no sign of price reduction under continued tightness of supply.
Power plants eased purchases as typhoon helped reduce coal consumption by lowering temperature. It's hard to find low-priced thermal coal due to high cost. Some traders said downstream users still have demand to restock after the typhoon, helping supporting prices at high level.
Seaborne import market was tepid. Most domestic power plants had secured cargoes for August consumption, while mid- and late-September cargoes stabilized at high levels. Whether Indonesian coal prices will continue to rise in the following days would depend on domestic demand as India also showed subdued demand. Indonesian 3,800 Kcal/kg NAR thermal coal was offered at $70-72/t FOB, on Supramax basis.
Coking coal delivery improved this week as road and railway shipment condition got better. Coking coal stocks at coking plants were at low- and medium-level. Tight supply further bolstered up prices of the material. Offers of gas coal by large mines in Zichang, Shaanxi rebounded by 50 yuan/t to 1,400 yuan/t, mine-mouth with VAT.
Sxcoal data showed coking coal stockpiles at Ganqimaodu increased slightly by 71,000 tonnes from a week ago to 161,000 tonnes.
Some coking plants reported losses or on the edge of loss due to high cost of coking coal. Speculative traders became more active as coke futures prices surged. Steel mills still had restocking demand and showed strong buying appetite as coke supply was unstable these days.
(Writing by Rebecca Liu Editing by Harry Huo)
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