Production area Prices leveled off as a whole in key production areas while some miners in Yulin of Shaanxi mildly raised prices. Encouraged by the previous price upticks at northern ports and an increase in rigid demand with more trucks coming for loading, some miners offering price-competitive coal slightly adjusted up prices. However, most miners still worked to reduce inventory due to inactive restocking by downstream users and doubted the strength of price increases.
Northern port Sentiment continued to cool down with the completion of short-covering replenishment and a decline in trading activities. Power plants presented flat demand due to sufficient stocks. The continued buy-sell disparity thickened wait-and-see sentiment and prompted some traders to lower down offers. Some traders said the downtrend is hard to reverse amid the slow restocking and continued weak demand. However, a significant decline is also unlikely due to restrained inflows to ports as it still doesn't make economic sense to transfer coal to port for sales.
Import market Imported coal prices were still supported by short-covering demand. But with the downward moving of domestic coal prices, some utilities slowed down their procurement pace. This, together with the fact that imported coal still lacked price advantage, stirred concerns of downside possibility. Indonesian 3,800 Kcal/kg NAR coal was awarded by Chinese utility at about 509 yuan/t, CFR with VAT.
A mildly-tightened supply was observed in Luliang of Shanxi, but the overall supply remained loose. Most coal mines continued to fulfill previous orders with no obvious sales pressure. Stabilizing coke prices helped to ease bearish sentiment in the coking coal market. Miners tended to maintain offer prices firm.
The seaborne coal market saw rigid restocking demand from some countries like India slightly pulling up Australian coal prices. But Chinese importers still shunned Australian coal purchases due to its weak price edge. U.S. coal started to attract buying appetite from China, with a deal of U.S. premium hard coking coal settled at $190/t CFR China, netting back to about 1,550 yuan/t, ex-stock with VAT.
As steel prices increased, steelmakers embraced improved margins, which promoted them to keep high capacity utilization and rigid restocking demand. However, most mills only placed orders on a need-to basis amid rational level of on-hand coke stocks. Coke inventory slightly accumulated in the production areas, and the overall supply leaned toward a loose status.
(Writing by Emma Yang Editing by Harry Huo)
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