China's thermal coal miners reported slightly cooled buying sentiment on September 28, partly due to currently over high coal prices.
Thermal coal prices at main production areas have risen to high levels after continued increases, which caused greater concerns among end buyers for price falls and possible risks. The number of coal trucks also declined, sources told Sxcoal.
A total 14 of 20 thermal coal mines surveyed by Sxcoal reported price rises of 30-100 yuan/t on September 28, compared with 19 mines a day ago. But several coal miners told Sxcoal they adjusted down offer prices since their offers now were too high.
"Offer prices of high-CV chemical coal indeed keep rising in recent two days amid smooth sales, but some chemical producers told us they can't accept high prices anymore," said one coal miner in Inner Mongolia.
The miner also told Sxcoal that he didn't found any obvious supply restraint from safety controls yet.
Several coal mines in Ordos ran out of sales quotas around the end of the month and therefore stopped or cut production. Though local authorities announced to replace paper sales quota with digital ones, we learned from local sources that its restriction on production and sales still exists.
Local offer prices of 5,600 Kcal/kg NAR 0.3%-sulfur thermal coal were at 1,200 yuan/t, and 6,100 Kcal/kg NAR 30-80mm lump coal were at 1,400 yuan/t, according to one coal producer.
The miner said the market is still short of the fuel and he though current prices are still reasonable and unlikely to slump.
Though the market eased, most thermal coal miners noted they thought coal prices are unlikely to drop ahead of 20th National Congress of CPC, as heating plants are about to fully initiate thermal coal purchases for the upcoming winter heating season.
About 47 coal enterprises in Ordos were assigned with coal supply guarantee tasks totaling 3.04 million tonnes for this heating period, according to local energy bureau. And in Inner Mongolia, the planned coal consumption of husbandry households totaled 4.1 million tonnes. The supply gap is quite large.
In Shanxi, slack coal (CV 5,500, S 0.2) was offered at 570 yuan/t in terms of government-set limits, sources noted. "The lump coal with the same CV rose 220 yuan/t to 1,780 yuan/t, which solely sold to chemical plants," said one Yangquan-based coal miner, adding he had about 20,000 tonnes coal stocks for now and will be shipped in just two days.
(Writing by Rebecca Liu Editing by Tammy Yang)
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